I don't whether the error you introduced is intentional or not, but 120 * 0.8 = 96, not 106. Another way of thinking about this is that 1.2 * 0.8 = 0.96, so it

I don't whether the error you introduced is intentional or not, but 120 * 0.8 = 96, not 106. Another way of thinking about this is that 1.2 * 0.8 = 0.96, so it is a four percent pay cut. (This is true for any situation like this and can be remembered by the difference of two squares formula from your early algebra class -- (1 + r)(1-r) = 1 - r^2, where r is the fraction raise/pay cut.)