Abdul’s salary is Rs 1,50,000 per month. He spends 10% of his salary on paying the school fees. He got an increment of 3% in his salary in the month of July, but the school fee was hiked by 5% the same month. What will be the net change in his savings in the month of July if the other expenditures are the same?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. Increase of Rs. 3750.
Salary of Abdul = Rs 150000
Let's assume his other expenditure is 0.
He spends 10% of his salary on paying the school fees
So, school fees = 10% of 150000 = 15000
His savings = 150000 - 15000
= 135000
After a 3% increment in his salary and a 5% increase in his school fees,
New salary = 150000 × (100 + 3)/100
= 154500
New school fees = 15000 × (100 + 5)/100
= 15750
New savings = 154500 - 15750 = 138750
So, the net change in his savings = 138750 - 135000 = Rs 3750 increases