If the length of a rectangle is increased by 20% while its width is reduced by 20%, what happens to its area?

Explanation

Assume the original length is x and the breadth is y, so the area is xy. After increasing length by 20%, the new length becomes (6x/5). After decreasing breadth by 20%, the new breadth is (4y/5). The new area is (6x/5) × (4y/5) = (24/25)xy, which is 4% less than the original area. Therefore, the area decreases by 4%.