A person spends 75% of his income. If his income increases by 15% and expenditure decreases by 10%, then what percentage increase will occur in his savings?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 90%.
Let the initial income be 100.
Initial expenditure = 75% of 100 = 75
Initial savings = 100 - 75 = 25
Now, new income = 115% of 100 = 115
New expenditure = 90% of 75 = 67.5
New savings = 115 - 67.5 = 47.5
Required increase = [(47.5 - 25)/25] × 100
⇒ 100 × 22.5/25 = 90%