The price of an item is increased by 15% and then the price is decreased by 12%. What is the effective percentage increase in the price of the item?

Let the initial price of the item be 100.After a 15% increase:
$$\text{Price}=100\times \left(1+\frac{15}{100}\right)=115$$
After a 12% decrease on the new price:
$$\text{Final Price}=115\times \left(1-\frac{12}{100}\right)=115\times 0.88=101.2$$
Effective net percentage increase:
$$\text{Net Change }\%=101.2-100=1.2\%$$
Alternative method using successive formula $a+b+\frac{ab}{100}$:
$$\text{Net Change}=15-12+\frac{15\times (-12)}{100}=3-\frac{180}{100}=3-1.8=1.2\%$$