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QUESTION

I am doing a math study guide and I can't figure out how to do this question.

I am doing a math study guide and I can't figure out how to do this question. To me the year two taxes should bring

the total back up to $1000 so there would be no percent increase or decrease, but I know that is wrong.

I would appreciate any help.

So I'm looking at it like Year 1 - 1000 - 20% = 800$

Year two taxes increase by 20% so your taxes would be back up at 1000. I know that isn't correct but I can't figure out what to do. Please help!

The study question is:

Suppose you originally paid $1000 in taxes. During year 1, taxes decrease by 20%. During year 2, taxes increase by 20%.

a.    How do your taxes for year 2 compare with the $1000 you originally paid?

b.   Find the percent increase or decrease from the original $1000 to year 2 taxes.

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