If a person increases his expenditure budget by 25% and the price of items, he purchases gets reduced by 10%, then what will be the increase in his purchasing capacity?

Question of The Day04-10-2021

Answer

Correct Answer : a ) \(38{8 \over 9} \ \)%

Explanation :

Purchasing capacity of a person is the total item he can buy for his consumption in a certain price.

The total consumption a person is doing is his purchasing capacity

We know,

25%=\(1 \over 4\) and 10%=\(1 \over 10\)

Let the initial expenditure was 4x

So, final expenditure will be 5x

Let the initial price of items was 10y

So, final price of items will be 9y

We know

Expenditure = Price × consumption

Thus,

% Increase in consumption=\({{{5x \over 9y}-{4x \over 10y}}\over {4x \over 10y}}×100\)=\({{50-36} \over {9×4}}×100\)

⇒\(1400 \over 36\)=\(38{8 \over 9}\) %

Hence, (a) is the correct answer.

Such type of question is asked in various government exams like SSC CGL, SSC MTS, SSC CPO, SSC CHSL, RRB JE, RRB NTPC, RRB GROUP D, RRB OFFICER SCALE-I, IBPS PO, IBPS SO, RRB Office Assistant, IBPS Clerk, RBI Assistant, IBPS RRB OFFICER SCALE 2&3, UPSC CDS etc.

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