Re: Confused About Cumulative Percentages
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04 Jul 2026, 12:11
You can treat percent increase/decreases as multiplication. A 10% increase is equivalent to multiplying the price by (100 + 10)% = 1.1, likewise a 20% increase is equivalent to multiplying by (100 + 20)% = 1.2.
A common mistake is to interpret iterative percentages as addition, but in fact you should treat them as multiplication. So the total increase would be 1.1 * 1.2 = 1.32 = (100 + 32)%, a 32% increase. Notice that this means that first applying to 20% increase and then the 10% increase results in the same thing, since 1.2 * 1.1 = 1.32 as well
You can gut check this by pretending the item is 100 dollars, so a 10% increase brings it to 110. When you apply a 20% increase on top of this 110, you get 110 + 20% * (110) = 110 + 22 = 132