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:________?

A. No change
B. 5 % decrease
C. 4 % increase
D. 4 % decrease

Let tax = Rs. 100 and consumption = 100 units

Original Expenditure = Rs. (100 × 100) = Rs. 10000

New Expenditure = Rs. (120 × 80) = Rs. 9600

Decrease in expenditure = (400/10000 x 100) % = 4 %

Correct Answer: 4 % decrease ✔

Last Updated: February 07, 2020