The price of onion increases by 12.5%. The consumption of onion also increases by 12.5%. What is the approximate percentage increase in the expenditure on account of the purchase of onions?

Let's assume the initial price and consumption of onion is 8y and 8z respectively.

initial expenditure on onion = $$8y\times8z$$ = 64yz

The price of onion increases by 12.5%.

New price of onion = 8y of (100+12.5)%

= 8y of 112.5%

= $$8y\times\frac{112.5}{100}$$

= 9y

The consumption of onion also increases by 12.5%.

consumption of onion after increase = 8z of (100+12.5)%

= 8z of 112.5%

= $$8z\times\frac{112.5}{100}$$

= 9z

New expenditure on onion after price increase = $$9y\times9z$$ = 81yz

Approximate percentage increase in the expenditure on account of the purchase of onions = $$\frac{\left(81yz-64yz\right)\times100}{64yz}$$

= $$\frac{17yz\times100}{64yz}$$

= 26.5625%

= 26.56% (approx.)