Multiple choice

Pramod saves 15% of his income. His income is raised by 12%, but the saving remains the same. Find the percentage increase in his expenditure?

  1. $14.10%$
  2. $35.26%$
  3. $14.12%$
  4. $35.45%$
  5. $None of these$
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let original income = 100. Savings = 15% of 100 = 15. Original expenditure = 100 - 15 = 85. New income = 100 + 12% of 100 = 112. Savings remain 15. New expenditure = 112 - 15 = 97. Percentage increase in expenditure = (97 - 85)/85 × 100 = 12/85 × 100 = 14.12%. This confirms option C is correct. The formula simplifies to (percentage increase in income)/(1 - savings rate) when savings are constant.

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