Question

The price of petrol is increased by 25%. By how much percent a car owner should reduce his consumption of petrol so that the expenditure on petrol would not be increased?
1. 25%
2. 30%
3. 50%
4. 20%

Answer 1

Correct Answer - Option 4 : 20%

Given:

The price of petrol increased by 25%

Formula Used:

% reduction = Change in consumption/Initial consumption × 100

Calculation:

Let the initial price of petrol be 4x

⇒ The price is increased by 25%

⇒ 4x × 125/100

⇒ 4x × 5/4

⇒ 5x

Let say a car owner consumes 25 liters 

⇒ His initial expenditure = 25 × 4x 

⇒ His initial expenditure = 100x

To maintain this expenditure,

⇒ His consumption = 100x/5x

⇒ His consumption = 20 liters

⇒ Reduction in the consumption = 25 – 20

⇒ Reduction in the consumption = 5 liters

⇒ % Reduction = 5/25 × 100

⇒ % Reduction = 20% 

∴ The % reduction in consumption to maintain his expenditure is 20%.