Question : A spends 68% of his monthly income. If A's monthly income increases by 25% and his monthly savings increase by 15%, then the percentage increase in his monthly expenditure will be:
Option 1:
Option 2:
Option 3:
Option 4:
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Correct Answer:
Solution :
Let Rs. 100 be the initial monthly income.
Initial expenditure = 68% of initial monthly income = Rs. 68
Initial savings = Rs. 100 – Rs. 68 = Rs. 32
Increase in income = 25%
Final monthly income = Rs. 100 + Rs. 25 = Rs. 125
Increase in savings = 15%
Final expenditure = Rs. 125 – Rs. 36.8 = Rs. 88.2
Increase in expenditure = Rs. 88.2 – Rs. 68 = Rs. 20.2
Hence, the correct answer is