Compound Percentages

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Compound Percentages

Multiple percentage changes:

  • NOT additive: 10% increase then 10% decrease ≠ 0% change
  • Multiply multipliers: +10% then -10% = 1.1 × 0.9 = 0.99 = -1%
  • Order doesn't matter: +20% then +30% = ×1.2 ×1.3 = ×1.56 = +56%

Example: Price increases 20%, then decreases 15%

Overall multiplier = 1.2 × 0.85 = 1.02 = +2% overall

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