Question : The price of onion increases by 12.5%. The consumption of onion also increases by 12.5%. What is the approximate percentage increase in the expenditure on account of the purchase of onions?
Option 1: 29.12%
Option 2: 24.82%
Option 3: 28.44%
Option 4: 26.56%
Correct Answer: 26.56%
Solution :
Given,
Price of onion increases = 12.5%
Consumption of onion increases = 12.5%
We know,
Expenditure = Price × Consumption
Let the original price and consumption be Rs 100 and 100 kg respectively
⇒ New price of onion after 12.5% increase
⇒ New consumption of onion after 12.5% increase
⇒ Original Expenditure = Original Price × Original Consumption = 100 × 100 = 10000 Rs/ kg
⇒ New Expenditure = New Price × New Consumption = 112.5 × 112.5 = 12656.25 Rs/kg
⇒ Increase in Expenditure = (12656.25 – 10000) = 2656.25 Rs/kg
⇒ % change in Expenditure =
Hence, the correct answer is 26.56%.
