UK Hi there, need some help plz!!

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I have come across this question and am having difficulty working out the "Energy" costs.

Since Energy costs here are fixed costs I thought it would be pretty simple.

This is how I got to my answer which happens to be incorrect, but I have tried every other way and cannot get to the correct answer and so would greatly appreciate some guidance.

I subtracted 3% from the 123,600 since there was an allowance for 3% which I thought would get me to the original energy cost.

= £123 600 - £3708 = £119,892

I then subracted 1% as there was a 1% decrease in energy costs.

= 119,892 - 1198.92 = 118,693.08

I then assumed I would have to add that extra 3% allowance again which brought me to...

118,693.08 + 1186.9308 = 119 880.01

So the answer I arrived at was £119, 880.01

I visted the answers section and the correct answer is in fact £118,800.

I have absolutely no idea how to get to this answer and have missed something key to this topic, I would greatly appreciate any help, thank you!
 

DrStrangeLove

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I'd point out that 118,800 = 123,600 x (0.99/1.03) = 123,600 x (1 - 0.01)/(1 + 0.03). That 1 + 0.03 is your allowance, and that 1 - 0.01 is your decrease in energy costs.
 
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