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Question
The Municipality of a town increases water tax by 20% and water consumption decreased by 20%. Then the percentage of increase or decrease in the monthly expenditure is:
Options
4% increase
4% decrease
5% increase
5% decrease
Solution 1
The Municipality of a town increases water tax by 20% and water consumption decreased by 20%. Then the percentage of increase or decrease in the monthly expenditure is: 4% decrease
Solution 2
4% decrease
Explanation:
Let initially rate of water tax was ₹ 100
By increasing the water tax rate by 20% per 1000 litre
then, water tax of 1000 litre = 120
Also, when consumption is reduced by 20%
new consumption`=1000xx80/100=800` litre
Now, water tax of 800 litres `=120/1000xx800=₹ 96`
Percentage decrease in expenditure
`=(100-96)/100xx100=4%`decrease
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