A bakery spends P4,800 a year on fuel. The cost rises by 6% in the first year, and the new amount rises by a further 4% in the second year. Work out the fuel cost after two years.
Show the mark scheme and the examiner note
Answer: P5,291.52
- Year one: 4800 × 1.06 = 5088
- Year two: 5088 × 1.04 = 5291.52
- Money to two decimal places: P5,291.52
Examiner technique: Two separate percentage rises never add up to 10%. Use a multiplier for each year and keep every digit until the final rounding.