Multiple choice

Passage

Directions : Study the passage carefully and answer the question that follows. Mr. Das is working in a construction company. He has a family, including his wife and a daughter. His total monthly income includes a salary of Rs. 9,228/- and a 10% house rent allowance. Due to increasing inflation, he is keeping a home budget that accounts for the income and expenses of the household. Out of his total monthly income, he spends 25% on food expenses, 18% on paying the house-rent, 9% on entertainment, 23% on the education of his child, 13% on medical expenses, and he saves 12% of his total monthly income. Based on the above information, answer the following question.

If the expenditure on food and entertainment is increased by 10% due to inflation in prices, what will be the new percentage of savings in the same monthly salary?

  1. 8.4%

  2. 8.6%

  3. 8.8%

  4. 8.2%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Initial: Food 25%, Entertainment 9%. Total = 34%. Increase by 10% of these values: 3.4%. New total expenditure = Old + 3.4%. Savings = 100 - (Total Expenses). New Savings = 100 - (Old Expenses + 3.4) = Old Savings - 3.4%. Original savings = 12%. New savings = 12 - 3.4 = 8.6%.

AI explanation

The current expenditure on food and entertainment is 25 percent and 9 percent respectively, summing to 34 percent of the total monthly salary. A 10 percent inflation increase on this combined expenditure adds 3.4 percent to the total expenditure (10 percent of 34 percent). Since total expenditure increases by 3.4 percent, the new savings percentage decreases from the original 12 percent to 12 - 3.4 = 8.6 percent.

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