The monthly turnover of a hardware shop in Indore rose by 20% in April, fell by 25% in May and rose by 40% in June, each change being measured on the previous month's turnover. Over the three months the turnover shows a net increase of what percent?

Each change acts on the month before it, so the factors multiply: $1.20\times 0.75\times 1.40=1.26$. The turnover ends 26% above where it started. (Adding the changes as 20 − 25 + 40 = 35% treats all three as though they were measured on the original turnover, but the 25% fall is taken on a bigger amount and the 40% rise on a smaller one.)