Question

Suresh spends 70 percent of his income. If his income increases by 20 percent and expenditure also increases by 10 percent, then by what percent will his savings increase?
1. 45.3 percent
2. 43.3 percent
3. 48.4 percent
4. 52.2 percent

Answer 1

Correct Answer - Option 2 : 43.3 percent

Given:

Suresh spends 70% of his income

Calculation:

Let Suresh's income be x

Expenditure of Suresh = 0.7x

⇒ Savings = x - 0.7x = 0.3x

Increased income = 1.2x

Increased expenditure = 0.77x

⇒ New savings = 1.2x - 0.77x = 0.43x

⇒ Increase in savings = 0.43x - 0.3x = 0.13x

% Increase in savings  = (0.13x/0.3x) × 100 = 43.3

∴ Increase in savings = 43.3%