Shortcut Trick
Income = Expenditure + Savings
Given E : S = 3 : 1 ⇒ Income (I) = 3 + 1 = 4 parts
Using the weighted average equation: E × Einc + S × Sinc = I × Iinc
⇒ 3 × Einc + 1 × 20% = 4 × 25%
⇒ 3 × Einc + 20 = 100 ⇒ 3 × Einc = 80 ⇒ Einc = 80/3% = 26 (2/3)%
∴ The correct answer is 26 (2/3)%.
Alternate Method
Given:
Ratio of expenditure to savings = 3 : 1
Increase in income = 25%
Increase in savings = 20%
Formula Used:
Income = Expenditure + Savings
Percentage Increase = (Increase ÷ Original Value) × 100
Calculations:
⇒ Let original expenditure be 300 and original savings be 100.
⇒ Original Income = 300 + 100 = 400
⇒ New Income = 400 + (25% of 400) = 400 + 100 = 500
⇒ New Savings = 100 + (20% of 100) = 100 + 20 = 120
⇒ New Expenditure = New Income − New Savings
⇒ New Expenditure = 500 − 120 = 380
⇒ Increase in Expenditure = 380 − 300 = 80
⇒ Percentage increase in Expenditure = (80 ÷ 300) × 100
⇒ Percentage increase = 80/3 = 26 (2/3)%
∴ The correct answer is 26 (2/3)%.
Additional Information
Income, Expenditure & Savings Rule
Income is the sum of expenditure and savings (I = E + S). Any percentage change in income is distributed between expenditure and savings based on their respective proportional weights.
Weighted Average Method
When a value is split into two parts, the net percentage change can be determined using: Total % Change = (Part1 × %Change1 + Part2 × %Change2) ÷ (Part1 + Part2). This method offers the fastest way to solve mixture and distribution type percentage problems.
Percentage Change Formula
Percentage Change = [(Final Value − Initial Value) ÷ Initial Value] × 100. Always make sure to use the original or old value as the base denominator.