Water tax is increased by 20% but its consumption is decreased by 20%. Then the increase or decrease in the expenditure of the money is?
Correct Answer: 4% decreased
Explanation:
Let tax = Rs. 100 and Consumption = 100 units
Original expenditure = Rs. (100 x 100) = 10000
New expenditure = Rs. (120 x 80) = Rs. 9600
∴ Decreased in expenditure = (400 x 100)/1000 % = 4%
