A person spends 72% of his income. If his income increases by 28% and his expenditure increases by 25%, then, what is the percentage increase or decrease in his savings (correct to one decimal place)?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. 35.7% increase.
Percentage of person spend 72% of their income
Let Income = 100
Expenditure = (100 × 0.72) = 72
Saving = (100 – 72) = 28
When income increases by 28% and Expenditure increases by 25%
New income = (100 × 1.28) = 128
New Expenditure = (72 × 1.25) = 90
New Saving = (128 – 90) = 38
Required percentage = (38 – 28)/28 × 100 = 1000/28 = 35.7%