Term 1 · Weeks 1–2 · Earning Money and Percentages

Challenge problem

Challenge

A kilo of rice costs ₱52 today. If prices rise by 6% per year because of inflation, what will a kilo cost in two years?

Show step-by-step solution

Answer: c. ₱58.43

Common errors to watch for

(b) Adding 6% twice (12%) ignores that the second increase applies to the already higher price.
(a) Applied only one year of inflation.
(d) Used 24% (6% × 4) instead of compounding twice.