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A shirt's price is increased by 25% and then discounted by 25%. The final price is what percent of the original?
A$100\%$
B$50\%$
C$87.5\%$
D$93.75\%$
Answer & Solution
Correct answer: D. $93.75\%$
Successive percentages compound multiplicatively: $1.25 \times 0.75 = 0.9375 = 93.75\%$ of original. The naive answer 100% ignores that the discount applies to the inflated price.
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