The ratio of a man’s expenditure to his saving is 3 : 2. His income increases by 15% and his saving increases by 9%. By what percentage does his expenditure increase?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 19%
Income is always expenditure + saving, so the new expenditure is the new income minus the new saving. Taking the expenditure as 300 and the saving as 200 keeps the values whole.
Old: expenditure 300, saving 200, income 500
New income \(=500\times1.15=575\)
New saving \(=200\times1.09=218\)
New expenditure \(=575-218=357\)
Increase \(\displaystyle =\frac{357-300}{300}\times100=\frac{57}{300}\times100=19\%\)
His expenditure increases by 19%.