on 9: Chloe is given a pay rise.
The next year Chloe is given another pay rise.
Her manager says that Chloe’s pay has increased by overall.
Explain why Chloe’s manager is wrong.

Chloe’s manager is mistaken because the two pay rises are applied to different base amounts. When Chloe receives a increase on her original salary, her pay increases by . Next year, the raise is calculated based on her new, higher salary, leading to a larger increase than just adding the two percentages together.

To put it in perspective, if Chloe’s original salary was $100, after the first raise, she’d earn $110. Then applying another raise would mean an increase of $11, making her new total . This results in an overall increase of , not , showing how percentages compound rather than simply add.