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Math Help - General percentage change question help!

  1. #1
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    General percentage change question help!

    A company imports components and pays in Euros. On a particular day in 2011; they found that the price of one component, in euros, was 10% less than it was when they bought it in 2009.
    The exchange rate had also changed over two years in reference to when they completed the transaction in 2009:

    a, 2009, 1E=1
    b, 2010, 1E = 0.95
    c, 2011, 1E = 0.90

    Find a percentage change in of the component in question between day a in 2009 and day c in 2011



    Right, there is obviously a 10% deduction in the exchange rate over the two years, but really struggling how to incorporate this into the initial price deduction?! Would it involve using P = M(1-r%)^n ?
    Any help would be greatly appreciated!
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  2. #2
    Senior Member MacstersUndead's Avatar
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    Re: General percentage change question help!

    If I understand the problem correctly, it isn't as hard as it appears.

    Let the price of the Item be P, in in the year 2009. P E = P in 2009
    Then the price of the Item, in Euros, in the year 2011, is (.90)P
    As you've noted, the decrease in terms of exchange is 10%, so the P in 2011 converted into pounds is (.90)(.90)P = (.81)P

    In summary, the price of the item went from P to (.81)P . Hence the net decrease (in terms of ) is 19%
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