A family has an annual income of Rs.8,00,000, out of which they save some money. They spend 15% of the total income on health. The expenditure done on education is half of the expenditure incurred on rent. The expenditure on food was Rs.40,000, which is 10% of the expenditure on rent. How much money (in Rs.) is saved?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Rs.40,000.
Annual income = Rs. 8,00,000
Health expenditure = 15% of income = 0.15 × 8,00,000 =1,20,000
Food expenditure = Rs. 40,000
Food expenditure = 10% of rent ⇒ Rent = 40,000/0.10 = 4,00,000
Education expenditure = half of rent = 4,00,000/2 = 2,00,000
Total expenditure = Health + Food + Rent + Education
= 1,20,000 + 40,000 + 4,00,000 + 2,00,000 = 7,60,000
Savings = Income – Expenditure
= 8,00,000 − 7,60,000 = 40,000