A person can save 25% of his income. If his income increases by 20% and still he saves the same amount as before, the percentage increase in his expenditure is ______.
Answer & explanation
Correct answer: option 1
Let income of Men = 100x
Saving = 25% of 100x = 25x
Expenditure = 75x
New Income = 100x + 20% of 100x = 120x
Saving(same) = 25
New Expenditure = 120x - 25x = 95x
Increase percentage in Expenditure= \(\frac{95x - 75x }{75x}\) × 100
= $26\frac{2}{3}$