A store increased the price of an item by 20% and then later decreased the new price by 20%. If the original price was P, what is the final price in terms of P?

✓ Correct Answer: Option A

An increase of 20% means the new price is P * (1 + 0.20) = 1.20P. A decrease of 20% on this new price means 1.20P * (1 - 0.20) = 1.20P * 0.80 = 0.96P.