A man spends 75% of his income. His income increases by 20% and his expenditure also increase by 10%. The percentage of increase in his savings is
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Correct answer: C
Explanation
The Correct Option is 3 i.e 50%
Let's assume the income = 100
Therefore, his expenditure = 75% of 100 = 75
So, the savings will be = 100 – 75 = 25
Net income after the increase of 20% = 120
And expenditure after the increase by 10% = 110% of 75 = 82.5
Therefore, new savings = New income – New expenditure = 120 – 82.5 = 37.5
Now, Increase in saving = 37.5 – 25 = 12.5
So, the percent increase in savings = 12.5 /25 × 100 = 50%.