Question

In 2021, the value of a house increased by 6%.

In 2022, the value of the house then decreased by 4%.
Carol says
"Over the two years, the value of the house increased by exactly 2%
because 6-4=2"
Show that Carol is wrong.

Answer 1

Explanation:

In 2021, the value increased by 6%, which means the value became 106% of its original value (100% + 6%).

In 2022, the value decreased by 4%, which means it became 96% of the value in 2021 (100% - 4%).

To find the overall change, you should multiply these percentages:

1.06 (for the increase in 2021) * 0.96 (for the decrease in 2022) = 1.0176

So, the value of the house increased by approximately 1.76% over the two years, not 2%. Carol's calculation of 2% is not accurate.