Question 1134655
profits increase by 77% one year and decrease by 22% the following year.


let's say your profits starts off as x.


if they increase by 77%, then the profits for the next year are equal to x + .77 * x which makes them equal to 1.77 * x.


if they then decrease by 22% the following year, then the profits for the following year would be 1.77 * x - .22 * 1.77 * x = 1.3806 * x.


your profits went from x to 1.3806 * x over the two year period.


that's an increase of .3806 * x which is equal to 38.06%.


here's how i think it works in dollars and cents.


assume your profits are 72 dollars for this year.


the next year they are increased by 77%.


the increase is therefore .77 * 72 = 55.44.


the profits next year are 72 + 55.44 = 127.44.


your profits the year after are decreased by 22%.


127.44 - .22 * 127.44 = 99.4032.


your profits over the two years are 99.4032 minus 72 = 27.4032.


that increase is 27.4032 / 72 = .3806 * 100 = 38.06%.


the 22% was taken off of next year's profit, not this year's profit.