A person could save 20% of his income. A year later, his income increased by 25% but he could save the same amount only as before. By what percentage has his expenditure increased?
Explanation:
Let the initial income of the person be Rs. 100. ∴ His initial savings = 20% of income = Rs. 20 ∴ His initial expenditure = 100 - 20 = Rs. 80
New income of the preson is 25% more than initial income = Rs. 125 ∴ His new savings is same = Rs. 20 ∴ His new expenditure = 125 - 20 = Rs. 105
⇒ % Increase in his expenditure = 105-8080 × 100 = 31.25%
Hence, option (b).
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