The ratio of income and expenditure of a person is 8 : 5. If her income increases by 25% and her expenditure increases by 28%, then what is the percentage increase in her savings?
Answer & explanation
Correct answer: option 2
25% = \(\frac{1}{4}\) & 28% = \(\frac{7}{25}\)
Ratio of , Income : Expenditure = 8 : 5
Let Income = 800 , Expenditure = 500
Saving = 800 - 500 = 300
New Income = 800 + \(\frac{1}{4}\) × 800 = 1000
New Expenditure = 500 + \(\frac{7}{25}\) × 500 = 500 + 140
= 640
New saving = 1000 - 640
= 360
Percentage increase = \(\frac{360 - 300}{300}\) × 300 = 20%