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    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?
    A 18% Correct Answer Incorrect Answer
    B 20% Correct Answer Incorrect Answer
    C 25% Correct Answer Incorrect Answer
    D 35% Correct Answer Incorrect Answer

    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% 

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