The price of cooking oil rises by 25%. By what percentage must a family cut its consumption of oil so that its spending on oil stays the same?

Explanation

1. 01

   Spending = price × consumption. Price becomes 1.25 times, so consumption must become $\frac{1}{1.25} = 0.8$ times.

2. 02

   Cut = $1 - 0.8 = 0.2$, i.e. 20%. (Shortcut: $\frac{25}{100 + 25} \times 100 = 20\%$.)