The ratio between the monthly income and the expenditure of Vaidic is 8 : 5. If his income increases by 20% and his expenditure increases by 30%, then find the percentage increase or decrease in his monthly savings.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. % increase.
Given:
The ratio between the monthly income and the expenditure of Vaidic is 8 : 5.
Let the monthly income and the expenditure of Vaidic be 8x and 5x respectively
Formula used:
Savings = Income - Expenditure
Calculations:
According to the question;
Savings = 8x - 5x = 3x
Vaidic increased monthly income = 8x × (120/100) = 9.6x
Vaidic increased expenditure = 5x × (130/100) = 6.5x
Vaidic new savings = 9.6x - 6.5x = 3.1x
Hence, the increased % of his savings = (0.1x/3x) × 100 = 10/3 = %