Sudha spends 80% of her income. When her income is increased by 30%, she increases her expenditure by 25%. Her saving is:
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. “Increased by 50%”
Suppose Income = 100
Expenditure = 100 × 0.8 = 80
Savings = 100 – 80 = 20
When income is increased by 30%:
New income = 100 × 1.3 = 130
New expenditure = 80 × 1.25 = 100
New savings = 130 – 100 = 30
Change in savings = [(30 – 20)/20] × 100 = 50% (Increase)