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# [Smart Math] Percentages Problem 31

Here’s and example of a SMART MATH problem for PERCENTAGES.

### Problem

A housewife reduces her consumption of coffee by 20% due to a 20% increase in price of coffee. What is the percentage effect on the expenditure on coffee?

1. 4% increase
2. 2% increase
3. No change
4. 2% decrease
5. 4% decrease

### The Usual Method

Assuming the original price of coffee as $100/unit So new price =$120/unit (20% increase)

Let the consumption be 100 units

New consumption = 80 units (20% decrease)

Original expenses of coffee = 100 x 100 = $10,000 New expenses of coffee = 80 x 120 =$9600

Hence, change = $10,000 –$9600 = \$400

Hence percentage change = $\frac{400}{10000}\times 100=4$% decrease.

(Ans: 5)

Estimated Time to arrive at the answer = 45 seconds.