A man spends 2/3rd of his income. If his income increases by 14% and the expenditure increases by 20%, then the percentage increase in his savings will be:
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 2%
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Understanding |
Application |
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Suppose the income of the person is Rs. P |
So, Expenditure = 2P/3 And Savings = P – 2P/3 = Rs. P/3 |
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His income increases by 14% and the expenditure increases by 20% |
So, New Income = 1.14P And New Expenditure = 2P/3 × 1.2 = 0.8P |
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New savings = 1.14P – 0.8P = 0.34P |
So, Percentage increase in savings = [(0.34P – P/3)/(P/3)] × 100 = 2% |