The tax on a commodity is diminished by 18% and its consumption increased by 15%.

The tax on a commodity is diminished by 18% and its consumption increased by 15%. The effect on revenue is?

Answer/Solution

5.7%

100 * 100 = 10000
82 * 115 = 9430
-----------
10000-----------570
100-----------? => 5.7% decrease
Answer: C

The tax on a commodity is diminished by % and its consumption increased by %. The effect on revenue is?

5.7

In order to solve problem, you must evaluate 100 - (n₁ / 100 + 1) * (1 - n₀ / 100) * 100.

n₀ =	18
n₁ =	15

100 - (n₁ / 100 + 1) * (1 - n₀ / 100) * 100
Evaluate n₁ / 100 = 0.15
100 - (0.15 + 1) * (1 - n₀ / 100) * 100
Evaluate 0.15 + 1 = 1.15
100 - 1.15 * (1 - n₀ / 100) * 100
Evaluate n₀ / 100 = 0.18
100 - 1.15 * (1 - 0.18) * 100
Evaluate 1 - 0.18 = 0.82
100 - 1.15 * 0.82 * 100
Evaluate 1.15 * 0.82 = 0.943
100 - 0.943 * 100
Evaluate 0.943 * 100 = 94.3
100 - 94.3
Evaluate 100 - 94.3 = 5.7
5.7
The answer to the problem and the result of 100 - (n₁ / 100 + 1) * (1 - n₀ / 100) * 100 is 5.7