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A family spends on groceries, rent, and other expenses in the ratio 3:5:2. Next year, groceries are expected to rise by 8%, rent by 4%, and other expenses to fall by 10%. What will be the overall percentage change in total expenditure?

1. 1% decrease
2. 2.4% increase
3. 1.2% increase
4. 0.8% decrease

Correct answer: 2.4% increase

Solution

Let the original expenditure be 10 units, split as 3, 5, and 2. After the changes, the new expenditure becomes 31.08 + 51.04 + 20.90 = 10.24 units. So the total expenditure increases by 0.24 units, i.e. 2.4%.

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