Posted by Lee on .
If the cost of a cell phone has decreased 400% during the past 10 years, does that correspond to a cost decrease of four times?
It makes no sense to me. It says the price went from +x to -3x, so they are paying you three times the original price just to give them away.
Since the cell carriers make their big money on the service charges, sometimes such giveaways make sense.
I suspect whoever wrote that question does not know what a 400% decrease means.
Thanks for the input.
Actually is does make sense. drwls misinterpreted the question. It's asking for a decrease of 400% over 10 year and NOT a percent decrease. This means, that for year 1, the cost of a cell phone drop by 40%. At year 2 it dropped by another 40%, and on and on until year 10. So 40%+40%+40%+40%+40%+40%+40%+40%+40%+40% = 400%.
So assume at year 1 the cost of a phone is $100. Then at year 2 it will be $60 since (1-0.4)*100=60. Using the same process, at year 3 it will be $36....Finally, at year 10, it's $1.00.
This is not the same as claim the prince dropped by 4 time over 10 years.