Question

A person saves 6% of his income.two years later his income sharts by 15% but his savings remain the same.find the hike in his expenditure

Answer 1

Did uSavings = I-old - E-old=.06*I-old

 0.94*I-old = E-old

After 2 years,

Savings = I – E

 0.06*I-old = 1.15*I-old – E

 E = (1.15-0.06)*I-old

 E = 1.09*I-old

Hence, E/E-old = (1.09*I-old) / (0.94*I-old)=1.1595

Hence expenditure increased by 15.95%

mean income increased by 15.95% after 2 years? If so, then the answer will be-