Here’s and example of a **SMART MATH** problem for **PERCENTAGES.**

**Problem**

**Problem**

A housewife reduces her consumption of coffee by 20% due to a 20% increase in price of coffee. What is the percentage effect on the expenditure on coffee?

- 4% increase
- 2% increase
- No change
- 2% decrease
- 4% decrease

**The Usual Method**

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Assuming the original price of coffee as $100/unit

So new price = $120/unit (20% increase)

Let the consumption be 100 units

New consumption = 80 units (20% decrease)

Original expenses of coffee = 100 x 100 = $10,000

New expenses of coffee = 80 x 120 = $9600

Hence, change = $10,000 – $9600 = $400

Hence percentage change = % decrease.

**(Ans: 5)**

*Estimated Time to arrive at the answer = 45 seconds.*

**Using Technique**

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From the table of % in the section of Percentages in Stuff to Remember, we note that if the rate of coffee increases by 20% in order to maintain the same expenses, the consumption should be reduced by 16%. But actually, the consumption is reduced by 20%. Hence the net effect is 4% (20 – 16 = 4) decrease in expenses.

**(Ans: 5)**

*Estimated Time to arrive at the answer = 5 seconds.*

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