In a company, all employees are getting equal wages. If the number of employees is increased by 20% and their wages per head are decreased by 18%, what is the percentage decrease in total wages?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. 1.6%.
Let the initial number of employees = x
The initial wage per employee = y
So, the initial total wages = xy
New number of employees = 1.20x
New wage per employee = 0.82y
New total wages = (1.20x)(0.82y) = 0.984xy
Decrease in total wages= xy - 0.984xy = 0.016xy
Percentage decrease = (0.016xy/xy) × 100 = 1.6%
Therefore, the percentage decrease in total wages is 1.6%.