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The percent error in their prediction can be calculated by finding the difference between the predicted value and the actual value, dividing that by the actual value, and then multiplying by 100 to get the percentage.
Predicted value: 275
Actual value: 265
Difference: 275 - 265 = 10
Percent error: (10 / 265) * 100 = 3.77%
So the correct answer is 3.77%.