A man's income increases by 21% and his expenditure increases by 9%. If his initial income was ₹45,000 and expenditure ₹27,000, find the percentage increase in savings.
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Correct answer: A
Explanation
Given:
Initial Income = 45,000; Expenditure = 27,000
Increase in Income = 21%; Increase in Expenditure = 9%
According to the formula:
Savings = Income − Expenditure
Percentage Increase = (New Savings − Old Savings) / Old Savings × 100
Old Savings = 45,000 − 27,000 = 18,000
New Income = 45,000 × 1.21 = 54,450
New Expenditure = 27,000 × 1.09 = 29,430
New Savings = 54,450 − 29,430 = 25,020
Increase = 25,020 − 18,000 = 7,020
Percentage Increase = (7,020 / 18,000) × 100 = 39%