A person spends 60% of his income. His income increased by 30% and he increased his expenditure by 20%. His percent savings will then be increased by:
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. 45%.
Let the initial income = ₹100 (for easy calculation)
Then,
Expenditure = 60% of ₹100 = ₹60
Savings = ₹100 − ₹60 = ₹40
After income increases by 30% (New income) = ₹100 + 30% of ₹100 = ₹130
Expenditure increases by 20% (New expenditure) = ₹60 + 20% of ₹60 = ₹72
New savings = ₹130 − ₹72 = ₹58
Increase = ₹58 − ₹40 = ₹18
Percentage Increase = (18/40) × 100 = 45%