Question

Directions for questions 35 to 40: Study the following details about a family's monthly income and expenditure and answer the question that follows.

Income	Amount / Rate
Basic salary	Rs. 5,000
Petrol allowance	20% of basic salary
PF deduction	10% of basic salary

Expenditure	Share of net income
Food	28%
House rent	22%
Entertainment	12%
Children's Education	25%
Other expenses	13%

If the family has no children, how much maximum can they save including PF?

• A. Rs. 2125
• B. Rs. 1950
• C. Rs. 1875
• D. Rs. 1750

Hint:

Remember that PF is already saved before it reaches the family, and add the freed-up education share to it.

Answer 1

The Correct Option is C

Step 1: List every expenditure head in rupees.
Using the net income of Rs. 5,500, found from \[ 5000 \times 1.10 = 5500 \]
and the value of 1 percent of it, which is Rs. 55, each head works out to
Food: $28 \times 55 = 1540$
House rent: $22 \times 55 = 1210$
Entertainment: $12 \times 55 = 660$
Children's education: $25 \times 55 = 1375$
Other expenses: $13 \times 55 = 715$

Step 2: Remove the education line and total the real spending.
With no children, the education line of Rs. 1,375 is never spent. What is genuinely spent is food, rent, entertainment and other expenses: \[ 1540 + 1210 + 660 + 715 = 4125 \]

Step 3: Find total savings in a single subtraction from gross income.
The family's full gross income is Rs. 6,000. Out of this, only Rs. 4,125 is genuinely spent, since there is no education cost. Everything else, the PF that was set aside plus the unspent education share, stays with the family: \[ 6000 - 4125 = 1875 \]

Final Answer:
The maximum the family can save, PF included, is Rs. 1,875. \[ \boxed{Rs.\ 1875} \]