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?
Question
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?
Solution
Sure, let's solve this step by step:
Step 1: Let's assume the person's income is X. According to the problem, the ratio of expenditure to savings is 5:3. So, the person's expenditure is 5X/8 and the savings is 3X/8.
Step 2: The income increases by 20%, so the new income is 1.2X.
Step 3: The expenditure increases by 10%, so the new expenditure is (5X/8)*1.1.
Step 4: The savings is the difference between income and expenditure. So, the new savings is 1.2X - (5X/8)*1.1.
Step 5: To find the increase in savings, subtract the original savings from the new savings. So, the increase in savings is [1.2X - (5X/8)*1.1] - 3X/8.
Step 6: Simplify the above expression to get the increase in savings.
So, the person's savings increase by the amount you get after simplifying the expression in step 6.
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