Can someone please help me out with the following problem?

If the price of petrol increases by 25%, by how much must a user cut down his consumption so that his expenditure on petrol remains constant?

Thanks,

Ron

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- Oct 13th 2010, 10:18 PMrn5aPercentage Problem
Can someone please help me out with the following problem?

If the price of petrol increases by 25%, by how much must a user cut down his consumption so that his expenditure on petrol remains constant?

Thanks,

Ron - Oct 13th 2010, 10:22 PMraphw
you have old_spending * 1.25 = new_spending_required_for_old_level

and old_spending_with_return = old_spending / new_spending_required_for_old_level = 1/1.25

the later is your result. (or better to say: 1- 1/1.25) - Oct 14th 2010, 08:54 PMrn5a
Sorry but couldn't understand your explanation. Can you please explain in an easier way? Why have you done

old_spending * 1.25 = new_spending_required_for_old_level

Thanks,

Ron - Oct 14th 2010, 09:08 PMpickslides
Maybe follow this line of thought.

Lets say $10 used to buy you 8 litres of petrol.

Now with a 25% increase implies $12.50 will now buy you 8 litres of petrol. You need to know how many litres to buy at the new price such that you are still only spending $10.

So 8 litres at $12.50 is $1.56 a litre.

So you need to know $1.56 by X (litres) = $10

Any better? - Oct 14th 2010, 10:14 PMrn5a
OK....understood but how do you get the answer as 20%?

Thanks,

Ron

OK...I got it....so he will be using 6.4 litres after price increase which means he will have to decrease consumption by (8-6.4)=1.6 litres which means (1.6*100)/8=20%