Video Explanation

Text Explanation

Before we solve the problem, let's talk about the common mistake. When a 20% increase is followed by a 10% decrease, this is not the same as a 10% increase. Whenever you have a series of percent increase & decreases, it is always completely incorrect to add and subtract the numerical values of the percents themselves. If you did this, you would have chosen the mistake answer of (E) $88.00. If you did this, you made the most predictable math mistake on the entire test. This question, like many that appear on the test, is designed to elicit this particular mistake. When a Quant question is designed with this mistake in mind, it's like a giant butterfly net into which myriad test-takers unwittingly run. If you learn nothing else, learn to recognize and avoid this mistake!

Let's solve this step by step. The original price of the sneakers was $80. We know 10% of 80 is 8, so 20% of 80 must be twice that, 16. The price after the 20% increase is 20 + 16 = $96.

Now, the employee picks up these $96 sneakers and buys them with a 10% discount. Ten percent of 96 is 9.6, so that's how much we subtract: 96 – 9.6 = 86.4. Thus, the price the employee paid is $86.40, answer = D.