Expanding encrypted image?

Hello all,

I created a encrypted image from a folder with read and write permission. The image was originally about 85gb and with nothing being deleted from it I was able to continue to add files to it. Problem was anything over I say a gb or so would not copy over and I would get a error stating the image didn't have enough room. I found it odd that the image would take smaller files just file but not large files. Now if I deleted enough files to make room it would take the larger file.

So my question is does a image with read and write permission expand? I looked around and saw a post on how to increase the actually drive size but this option is greyed out in disk util for this image nor can I decrypt it. so Currently it looks like Im going to have to drag all the files back to the harddrive and find a different solution.

thanks in advance

TW