A man spends 75% of his income. His income increases by 20% and his expenditure also increases by 10%. Find the percentage increase in his savings.
Show answer & explanation
Correct answer: B
Explanation
The correct option is 2.
let the income = rs 100
expenditure = 75% of his income = 75% of 100 = rs 75
savings = 100 - 75 = 25 (savings = income − expenditure)
income increases by 20%
new income = 100 + 
× 100 = 100 + 20 = rs 120
new expenditure = 75 + 
× 75 = 75 + 7.5 = rs 82.5
new savings = 120 - 82.5 = 37.5
increase in savings = new savings - initial savings = 37.5 - 25 = rs 12.5
% increase in savings = 
× 100 = 50%