Question
The expenditure-to-savings ratio
for Person 'A' is 5:4. If their income rises by 25% and their savings grow by 31.25%, what percentage increase should be applied to their expenditure?Solution
ATQ,
Let, expenditure and savings of 'A' be Rs. 5x and Rs. 4x, respectively. Therefore, income of 'A' = 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%Â
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