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Select the correct answerThe 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?Options3 1/3%36 2/3%13 1/3%30 1/3%

Question

Select the correct answerThe 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?Options3 1/3%36 2/3%13 1/3%30 1/3%

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Solution

Let's solve this step by step:

  1. The ratio of expenditure and savings is 5:3. This means that if the person's total income is 8 (5+3), then 5 parts are spent and 3 parts are saved.

  2. If the income increases by 20%, the new income becomes 120% of 8, which is 9.6.

  3. If the expenditure increases by 10%, the new expenditure becomes 110% of 5, which is 5.5.

  4. The new savings can be found by subtracting the new expenditure from the new income. So, 9.6 - 5.5 = 4.1.

  5. To find the percentage increase in savings, we subtract the original savings from the new savings, divide by the original savings, and then multiply by 100. So, ((4.1 - 3) / 3) * 100 = 36 2/3%.

So, the person’s savings increase by 36 2/3%.

This problem has been solved

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