Radha saves 25% of her income. If her expenditure increases by 20% and her income increases by 29%, then her savings increase by:
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 56%
Saving = Income – Expenditure
Let the income of Radha be100 unit
Present saving of Radha = 100 × 25% = 25 unit
Present expenditure of Radha = 100 – 25 = 75 unit
If income increases by 29% and expenditure increases by 20%
Then
New income = 100 + (100 × 29%)
⇒ 100 + 29 = 129 unit
The new expenditure = 75 + (75 × 20%) = 90 unit
The new saving = 129 – 90 = 39 unit
The saving increases = 39 – 25 = 14 unit
Increases percent of saving = (14/25 × 100) = 56%