Suresh’s expenditure and savings are in the ratio of 3 : 1. His income increases by 25%. If his savings increase by 20%, then by how much percentage does his expenditure increase?

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Accepted Answer

Let Suresh's initial savings be x and expenditure be 3x (since ratio is 3:1). So, initial income = expenditure + savings = 3x + x = 4x.

Income increases by 25%, so new income = 4x * 1.25 = 5x.

Savings increase by 20%, so new savings = x * 1.20 = 1.2x.

Let new expenditure be E.

Since new income = new expenditure + new savings,
5x = E + 1.2x
=> E = 5x - 1.2x = 3.8x

Initial expenditure = 3x

Increase in expenditure = 3.8x - 3x = 0.8x

Percentage increase in expenditure = (0.8x / 3x) * 100 = (0.8 / 3) * 100 = 26.666...% = 26 2/3 %.

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