Question
The expenditure-to-savings ratio
of an individual 'P' is 5:4. If the person's income rises by 25% and their savings increase by 31.25%, what percentage increase should their expenditure undergo?Solution
ATQ, Let, expenditure and savings of a person 'P' be Rs. 5x and Rs. 4x, respectively. Therefore, income of 'P' = expenditure + savings = 5x + 4x = Rs. 9x According to question, 9x × 125% = 4x × 131.25% + Expenditure Expenditure = 11.25x – 5.25x = Rs. 6x Therefore, percentage increase in expenditure = [(6x – 5x)/5x] × 100 = 20%
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