Multiple choice

Passage

Directions: Study the passage carefully and answer the question that follows. Mrs. Rina is a teacher at a government school. She lives with her husband and two children. Her total monthly income includes a salary of Rs. 18,450 and a 10% transport allowance. Due to rising living costs, she maintains a strict household budget. Out of her total monthly income, she spends 25% on groceries, 20% on rent, 7% on recreation, 23% on children's education, 13% on health expenses, and saves 12% of her total monthly income.

If her grocery and recreation expenses increase by 10% due to inflation, what will be the new percentage of savings from her salary?

  1. 8.4%

  2. 8.6%

  3. 8.2%

  4. 8.8%
Reveal answer Fill a bubble to check yourself
D Correct answer
AI explanation

Mrs. Rina's base percentage allocation for groceries and recreation is 25% and 7% respectively, totaling 32% of her income. When these expenses increase by 10% due to inflation, the new combined percentage becomes 32% plus 3.2% (which is 10% of 32%), equaling 35.2%. Since her original savings percentage was 12%, subtracting the 3.2% increase in expenditures leaves her with new savings of 8.8%.

Keep practicing — related questions