Anu spends 68% of her monthly income. If her monthly income increases by 20% and her monthly savings increase by $9\frac{3}{8}$%, then the percentage increase in her monthly expenditure is:
Answer & explanation
Correct answer: option 2
68% = \(\frac{17}{25}\) , 20% = \(\frac{1}{5}\) & 9\(\frac{3}{8}\)% = \(\frac{3}{32}\)
Let the income = 100x
Expenditure = 100x ×\(\frac{17}{25}\) = 68x
Savings = 100x - 68x = 32x
New income = 100x × \(\frac{6}{5}\) = 120x
New savings = 32x + \(\frac{3}{32}\) × 32x = 35x
New expenditure = 120x - 35x = 85x
Increased expenditure = 85x - 68x = 17x
Percentage increased expenditure = \(\frac{17x}{68x}\) × 100 = 25%