Question 46

A woman spends 80% of her income. With the increase in the cost of living, her expenditure increases by 37.5% and her income increases by 25%. Her present percent saving is

Tip: It is always convenient to use fractions in place of percentages. For example, 37.5% can be written asΒ $$\frac{3}{8}$$

As per the question, the initial expenditure was 80% of her income.Β 

Let us assume the income as x, and her initial expenditure asΒ $$\frac{8}{10}$$ of x. This implies that the initial saving wasΒ $$\frac{2}{10}$$x.

Now, her expenditure is increased by 37.5%, which means it becomesΒ $$\frac{11}{10}$$x or 1.1x.

For her income, it is given that the same increased by 25%. This means that the income is nowΒ $$\frac{5}{4}$$x or 1.25x.

Subtracting her new expenditure from new income, we get the savings as 0.15x, which is 12% of 1.25x.

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