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A family's monthly income increased by 15%. They increased their monthly expenditure on food by 10% and on rent by 20%. If their initial monthly expenditure on food was тВ╣12,000 and on rent was тВ╣8,000, and their initial monthly savings were тВ╣15,000, what are their new monthly savings? (Assume that there is no other expenditure.) 7358
тВ╣18,650
тВ╣17,450
тВ╣25,000
тВ╣15,000
тВ╣17,450
Calculate the net change in total expenditure (120000.1 + 80000.2 = 1200 + 1600 = 2800) and compare with the increase in income (0.15 * (12000+8000+15000) = 0.15 * 35000 = 5250) to find the net gain.
Initial food expenditure = тВ╣12,000, initial rent = тВ╣8,000, initial savings = тВ╣15,000. Income increases by 15%, food by 10%, rent by 20%.
SavingsnewтАЛ=IncomenewтАЛтИТ(Expenditurefood,newтАЛ+Expenditurerent,newтАЛ)
Calculate the net change in total expenditure (120000.1 + 80000.2 = 1200 + 1600 = 2800) and compare with the increase in income (0.15 * (12000+8000+15000) = 0.15 * 35000 = 5250) to find the net gain.
Students often forget to include the initial savings in the total income calculation, leading to an incorrect base for the 15% increase.
Calculate Total Initial Income
Total income is the sum of all expenditures and savings: 12,000+8,000+15,000=35,000.
IncomeinitialтАЛ=35,000
Calculate New Income
Income increases by 15%: 35,000+(15%┬аof┬а35,000)=35,000+5,250=40,250.
IncomenewтАЛ=40,250
Calculate New Expenditures
New food expenditure: 12,000├Ч1.10=13,200. New rent: 8,000├Ч1.20=9,600. Total new expenditure: 13,200+9,600=22,800.
ExpnewтАЛ=22,800
Calculate New Savings
New savings is New Income minus New Expenditure: 40,250тИТ22,800=17,450.
SavingsnewтАЛ=17,450
B is correct because the final calculated value after accounting for the income increase and adjusted expenditures is тВ╣17,450.
This concept of income vs. expenditure is foundational in Data Interpretation (DI) sets often found in banking and management entrance exams.
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