Mr. Das is working in a construction company. He has a family, including his wife and a daughter. His total monthly income includes a salary of Rs. 9228/- and a 10rent allowance. Due to increasing inflation, he is keeping a home budget that accounts for the income and expenses of the household. Out of his total monthly income, he spends 25% on food expenses, 18% on paying the house-rent, 9% on entertainment, 23% on the education of his child, 13% on medical expenses, and he saves 12% of his total monthly income.

If the expenditure on food and entertainment is increased by 10% due to inflation in prices, what will be the new percentage of savings in the same monthly salary?

The correct option is 8.6%.

Let's break down the problem step-by-step to find the new percentage of savings.

Step 1: Understand the initial percentage breakdown of the total monthly income

The total monthly income is treated as 100%. The original expenditure and savings percentages are as follows:

• Food = 25%
• House-rent = 18%
• Entertainment = 9%
• Education = 23%
• Medical expenses = 13%
• Savings = 12%

Step 2: Calculate the increase in expenditures due to inflation

The expenditure on food and entertainment increases by 10%.

• Initial percentage spent on Food and Entertainment combined:

$\text{Combined Percentage}=25\%+9\%=34\%$

• Increase in this combined expenditure by 10%:

$\text{Increase in percentage}=10\%\times 34\%=3.4\%$

This means that an extra 3.4% of the total monthly income is now required for food and entertainment.

Step 3: Calculate the new percentage of savings

Since the total income remains constant, any increase in expenditure directly reduces the percentage saved.

$\text{New Percentage of Savings}=\text{Original Savings Percentage}-\text{Increase in Expenditure Percentage}$

$\text{New Savings}=12\%-3.4\%=8.6\%$

Thus, the new percentage of savings in the same monthly salary is 8.6%.