Ramesh spends 60% of his income. If his income is increased by 30% and his expenditure is increased by 20%, then the percentage increase in the savings of Ramesh will be:
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. 45%.
Let the initial income of Ramesh be 100x.
Expenditure = 60x
Savings = 40x
Now, increased income = 130% of 100x = 130x
Increased expenditure = 120% of 60x = 72x
New savings = 130x - 72x = 58x
Required percentage = [(58x - 40x)/40x] × 100
⇒ 100 × 18x/40x = 45%