A person saves 45% of his income. Next year, his income increases by 200%. He increases his savings by five times the previous year’s savings. By what percentage (correct to one place of decimal) has he increased/decreased his expenditure?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Increased, 36.4%.
Let the person's initial income be ₹100.
Savings = 45% of ₹100 = ₹45
Expenditure = 100 - 45 = ₹55
New income = 100 + (200/100) × 100 = 100 + 200 = ₹300
New savings = 5 × 45 = ₹225
New expenditure = 300 - 225 = ₹75
Increase in expenditure = ₹75 - ₹55 = ₹20
Required percentage = (20/55) × 100 = 36.3636...% = 36.4% (approx)
Therefore, the person has increased his expenditure by 36.4%.