Multiple choice

Surbhi spends 75% of her income. If her income increases by 20% and savings decreases by 1%, then the percentage increase in her expenditure is:

  1. 27

  2. 2.2

  3. 22

  4. 2.7
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A Correct answer
Explanation

Let Income = 100, Expenditure = 75, Savings = 25. New Income = 120. New Savings = 25 * 0.99 = 24.75. New Expenditure = 120 - 24.75 = 95.25. Increase = 95.25 - 75 = 20.25. Percentage increase = (20.25/75)*100 = 27%.

AI explanation

Using the 100 base method, let her initial income be 100, so her expenditure is 75 and her savings are 25. Her new income becomes 120, and since her savings decreases by 1 percent, the new savings amount is 24.75, making her new expenditure 120 minus 24.75, which equals 95.25. The increase in expenditure is 95.25 minus 75 equals 20.25; dividing 20.25 by 75 yields a 27 percent increase.

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