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 gets a 15% inflation allowance on the basic salary, then what is the gross income of the family?

• A. Rs. 6150
• B. Rs. 6250
• C. Rs. 6750
• D. Rs. 7000

Hint:

Add the inflation allowance, a percentage of the basic salary, to the earlier gross income.

Answer 1

The Correct Option is C

Step 1: Express gross income as a single multiple of the basic salary.
The petrol allowance adds 20 percent to the basic salary and the new inflation allowance adds a further 15 percent to the basic salary. Since both are stated as a percentage of the same basic salary, they can be added together before applying them.
\[ 20\% + 15\% = 35\% \]

Step 2: Apply the combined percentage to the basic salary.
\[ \text{Gross income} = 5000 + 0.35 \times 5000 = 5000 \times 1.35 \]
\[ 5000 \times 1.35 = 6750 \]

Step 3: Sanity check against the earlier gross income.
The earlier gross income without the inflation allowance was Rs. 6,000, and adding Rs. 750 (15 percent of Rs. 5,000) to it also gives Rs. 6,750, which matches.

Final Answer:
With the inflation allowance, the family's gross income rises to Rs. 6,750. \[ \boxed{Rs.\ 6750} \]