Suresh’s expenditure and savings are in the ratio of 3 : 1. His income increases by 25%. If his savings increase by 20%, then by how much percentage does his expenditure increase?

Correct — A. Put the ratio into units: expenditure 3, savings 1, so income = 4 units.

Income rises 25%: 4 → 4 × 1.25 = 5
Savings rise 20%: 1 → 1 × 1.20 = 1.2
New expenditure = 5 − 1.2 = 3.8

Rise in expenditure = 3.8 − 3 = 0.8, on a base of 3
0.8⁄3 = 80⁄300 = 26⅔% → option (a)

Why the others are wrong

• (b)
  27⅔% puts expenditure at 3.83, leaving savings at 5 − 3.83 = 1.17 — a 17% rise, not the 20% the stem states.
• (c)
  25⅔% puts expenditure at 3.77, so savings must be 5 − 3.77 = 1.23, a 23% rise. The stem fixes savings growth at 20%.
• (d)
  28⅔% puts expenditure at 3.86 and savings at 1.14, a 14% rise. It overshoots expenditure by 0.06 units and undershoots savings by the same 0.06, because the two rises must together equal the income's 1.

Income = expenditure + savings, and that identity is what makes the question solvable — the three percentage changes cannot be chosen independently.

Put the ratio into units first: expenditure 3, savings 1, income 4. Every percentage then acts on a number you can hold in your head.

In units the income gains 25% of 4 = 1, savings take 20% of 1 = 0.2, so expenditure must absorb the remaining 0.8 — which is 0.8⁄3 of its own base.

Key facts

• Income = expenditure + savings, so the three percentage changes are locked to one another.
• A 3 : 1 expenditure-to-savings split makes income 4 units.
• A 25% rise on 4 units is 1 unit, of which savings absorb 0.2 and expenditure 0.8.
• A rise of 0.8 on a base of 3 is 80⁄3 % = 26⅔%.

Common traps

• Answering 25% − 20% = 5%, which ignores the 3 : 1 weighting altogether.
• Applying the 25% rise to expenditure's 3 units instead of to income's 4.
• Reading 3 : 1 as expenditure to income rather than expenditure to savings.

No directly related past PYQ was found.