In the new budget, the price of petrol has risen by 20%. By how much percentage must a motorist reduce consumption of petrol so that his expenditure on it does NOT increase?

Correct option is C

Given:

Petrol price increases by 20%.

The motorist wants no increase in expenditure.

Concept Used:
To maintain the same expenditure when price increases, consumption must decrease proportionally.

Formula Used:
If price increases by x%, the required reduction in consumption y% is given by:

y = $$\frac{x}{100 + x} \times 100$$​​

Solution:

​$$y = \frac{20}{100 + 20} \times 100 \\ \ \\ = \frac{20}{120} \times 100 \\ \ \\ = \frac{1}{6} \times 100 \\ \ \\ = 16\frac23\%$$​​

So, the motorist must reduce consumption by $$16\frac23\%$$​​