Question : The ratio of expenditure to savings of a woman is 5 : 1. If her income and expenditure are increased by 10% and 20%, respectively, then find the percentage change in her savings.
Option 1: 55%
Option 2: 60%
Option 3: 50%
Option 4: 40%
Correct Answer: 40%
Solution :
Given: The ratio of expenditure to savings of a woman is 5 : 1.
Let the initial expenditure and savings be 500 units and 100 units respectively.
So, the initial income = 500 + 100 = 600 units
After her income and expenditure are increased by 10% and 20%, respectively.
The new income = 600 × $\frac{110}{100}$ = 660 units
and the new expenditure = 500 × $\frac{120}{100}$ = 600 units
So, the new savings = 660 – 600 = 60 units
$\therefore$ The percentage change in her savings = $\frac{100-60}{100}$ × 100 = 40%
Hence, the correct answer is 40%.
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