Question

Ratio of Ram expenditure and saving is 7 ∶ 5. If his income is increased by 15% and expenditure is increased by 10%, then find his saving increase.
1. 22%
2. 25%
3. 29%
4. 26%

Answer 1

Correct Answer - Option 1 : 22%

Given:

Ram expenditure and saving ratio = 7 ∶ 5

15% increase in income and expenditure increases = 10%

Formula used

Income = expenditure + saving

Calculation

The ratio of expenditure and saving = 7 ∶ 5

Let the expenditure and Saving be 70x and 50x respectively

So Total income = 70x + 50x = 120x

New total income = 120x × (115/100) = 138x

New Expenditure = 70x × (110/100) = 77x

New Saving = 138x – 77x = 61x

Change in saving = 61x – 50x = 11x

Increase % = (11x/50x) × 100 = 22%

∴ Increase in saving is 22%