Question
The price of a certain item rises by 40%, while the
consumption is decreased by 20%. Calculate the percentage increase or decrease in the expenditure.Solution
Let the original quantity be ‘x’ units and the price per unit be Rs. ‘y’.Initial expenditure = Rs. xy
New price = Rs. 1.40y
Decreased consumption = 0.80x
New expenditure = 1.40y × 0.80x = Rs. 1.12xy
Hence, the expenditure increases by 12%.
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