A man saves 25% of his monthly income. Due to a 20% increase in his income, his expenditure also increases by 20%. Now he can save Rs.1,500 per month. Find his original monthly income.
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Rs.5,000
Let a man monthly income be 100 units
Given that
He saves 25 % of his income means 25 units
Then his expenditures = 100 - 25 = 75 units
Now, his income increases by 20% means 120 units
His expenditure also increases by 20% means 75 × 1.2 = 90 units
Then his savings = 120 - 90 = 30 units
According to the question
30 units = 1500 Rs
1 unit = 1500/30 = 50 Rs
Hence his original monthly income = 100 units = 100 × 50 Rs = 5000 Rs