A man spends 75% of his income. Due to inflation, his expenses increase by 20%, and his income increases by 10%. What is the percentage change in his savings?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. 20% decrease.
Let income = 100
Expenses = 75
Savings = 100 - 75 = 25
New income = 110
New expenses = 75 × 1.2 = 90
New savings = 110 - 90 = 20
Decrease in savings = 25 - 20 = 5
Decrease percentage = (5/25) × 100 = 20%