The ratio of income and expenditure of a person is 8 : 5. If her income increases by 25% and her expenditure increases by 28%, then what is the percentage increase in her savings?
Explanation:
Ratio of income and expenditure is 8 : 5.
Let the income be Rs. 800 and Expenditure be Rs. 500. Therefore, his savings = Rs. 300.
New income = 800 × 5/4 = Rs. 1000 New expenditure = 500 × 1.28 = Rs. 640
∴ New savings = 1000 - 640 = 360
∴ % increase in savings = (360 - 300)/300 × 100 = 20%.
Hence, option (b).