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A bakery's revenue increased by 20% from 2022 to 2023, then decreased by 10% from 2023 to 2024, ending at $129,600. What was the bakery's revenue in 2022?
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Correct answer
C
The two changes compose multiplicatively, not additively: a 20% increase followed by a 10% decrease scales revenue by 1.20 × 0.90 = 1.08 overall. So 2022 revenue × 1.08 = $129,600, and dividing gives $129,600 ÷ 1.08 = $120,000.
Check it forward: $120,000 × 1.2 = $144,000 (the 2023 revenue), then $144,000 × 0.9 = $129,600 (the 2024 revenue), which matches. The two percent changes do not net to a flat +10% on a single base, so you must divide the combined factor out of the final value, not multiply by it.
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