A man spends 80% of his income. His income has increased by 25%, but his expenditure remains the same.
By what percent have his savings increased?
Show answer & explanation
Correct answer: A
Explanation
Expenditure = 80% ⇒ Savings = 20%
Increase in Income = 25%
Savings = Income − Expenditure
Assume Initial Income = 100
Expenditure = 80
Savings = 20
New Income = 125
New Savings = 125 − 80 = 45
Increase = 45 − 20 = 25
Percentage Increase = (25/20) × 100 = 125%