The ratio of expenditure and savings of a person is 5 : 3. If the income increases by 20% and the expenditure increases by 10%, then the person’s savings increase by:
Answer & explanation
Correct answer: option 1
The ratio of expenditure and savings of a person = 5 : 3
Let Expenditure = 50 & Savings = 30
Income of person = 50 + 30 = 80
New income of person = 80 × \(\frac{120}{100}\) = 96
New expenditure of person = 50 × \(\frac{110}{100}\) = 55
New savings = 96 - 55 = 41
Saving increased by = \(\frac{41 - 30}{30}\) × 100
= 36\(\frac{2}{3}\)%