If a price increases by 12% and then by 5%, what is the total percentage increase?

If a price increases by 12% and then by 5%, what is the total percentage increase?

• A. 18%
• B. 15%
• C. 16%
• D. 17.6%

Answer: (D)

When a price rises first by 12% and then by 5%, the second increase applies to the new, higher price, not the original one. So you multiply the factors: 1.12 (for the 12% rise) times 1.05 (for the 5% rise). That gives 1.12 × 1.05 = 1.176, which means a total increase of 17.6%. Another way to see it is to add the percentages and include the overlap: 12% + 5% = 17%, plus the product of the two increases (0.12 × 0.05 = 0.006 or 0.6%), totaling 17.6%. That’s why the overall increase is 17.6%.

When a price rises first by 12% and then by 5%, the second increase applies to the new, higher price, not the original one. So you multiply the factors: 1.12 (for the 12% rise) times 1.05 (for the 5% rise). That gives 1.12 × 1.05 = 1.176, which means a total increase of 17.6%.

Another way to see it is to add the percentages and include the overlap: 12% + 5% = 17%, plus the product of the two increases (0.12 × 0.05 = 0.006 or 0.6%), totaling 17.6%.

That’s why the overall increase is 17.6%.