The price of sugar rises by 20%, but a family can increase its spending on sugar by only 8%. By what percentage must the family reduce its consumption of sugar?

Explanation

1. 01

   Spending = price × consumption, so new consumption = $\frac{1.08}{1.2}$ of the old.

2. 02

   $\frac{1.08}{1.2} = 0.9$, so consumption must fall to 90%.

3. 03

   Reduction = 10%.