The price of a book is increased by 20% and the new price is then reduced by 20%. Compared with the original price, the final price is

Explanation

1. 01

   Take the original price as 100, which makes the arithmetic easy to follow.

2. 02

   A 20% increase gives $100 \times 1.2 = 120$.

3. 03

   The 20% reduction is applied to 120, not to 100: $120 \times 0.8 = 96$.

4. 04

   So the final price is 96 against an original 100, a fall of 4%.