The expenditure of a man is 70% of his income. If his income will successively increase by 20% and 50%, then his new expenditures is how much percentage more/less than his previous expenditure, so that his new savings become 2.5 times of the previous savings?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is Option 1 i.e. More, 50%.
Let the initial income of the man be Rs.100
Expenditure = 70% of 100 = Rs.70
Savings = 100 - 70 = Rs.30
If his income will successively increase by 20% and 50%
20 + 50 + 1000/100 = 70 + 10 = 80%
Hence, his income increased by 80%
So, his new income = 100 of 180% = Rs.180
His new savings = 2.5 × 30 = Rs.75
Hence, new expenditure = 180 - 75 = Rs.105
Percentage change in expenditure = (105 - 70)/70 × 100 = 35/70 × 100 = 50% more