Question

The cost of food accounted for 25% of the income of a particular family. If the income get raised by 20%, then what should be the percentage point decreased in the food expenditure as a percentage of the total income to keep the food expenditure unchanged between the two years?

3.5
8.33
4.16
5

Answer 1

Hey there!

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Your answer is 4.16%.

Explanation :

Let's take 100 be the initial income.

The initial food expenditure is 25%.

∴ The new income goes to 120.

Now, food expenditure has to be constant or maintained at 25.

Therefore, the percentage of the new income is $\frac{25}{100} \times 100 =$ 20.833%

Hence, the percentage point drop from 25 - 20.833 = 4.16%