[DELETED - DID NOT PROVIDE SOURCE]

[sssddq]

[deleted - see below]

[JonathanSchneider]

Hi, can you please cite the source here?

[frigorificos]

Let the expenditure be E and the savings be S

so total income for year ONE is E + S

what we are asked to find is the fraction of income which has to be saved -----> e/(e+s)

if he saves S dollars this year then he will have s(1+r) dollars available for next year.

but the amount available for next year should be half of last years expenditure (e/2)


=>> e / 2 = s(1+r) =>> e/s = 2(1+r)------EQ1

We've got to calculate the fraction e/e+s which is same as 1/ ((e/s) + 1) ----------- EQ2

Substitute EQ1 in EQ2 to get 1 /(r+3) ANS

[JonathanSchneider]

Sorry, but I had to delete this one. The original poster did not provide the source. Please read the forum guidelines before posting. Thanks!