How to get the true change of percentage values

Question

State whether the following statement is true or false. If false, state the true change.

If the profits in your consulting business increase by 6% one year and decrease by by 2% the following year, your profits are up by 4% over two years.

I know this statement is false but I am having trouble calculating the true change.

My professor gave us the formula:
New profits value=(100+P)% x (100-Q)% x original profits value.

I tried asking my professor for help, but he only told me the original profits value does not enter in since they ask for your profits over two years. When I tried to plug it all in, I got an outrageously large number and even when I tried to enter it into the homework it told me it was wrong.

The answer should be a percent.

Answer 1

p represents the starting profits

1.06p represents the profits in the good year

(0.98)(1.06p) represents the profits in the not so good year.

 

You end up with 

 

1.0388p

 

So you over all increase was 3.88%