Question

A person spends 60% of his income. His income is Increased by 30% and his expenditure is increased 35%. By how much percent of his saving will increase or decrease?
1. 24.5%
2. 22.5%
3. 27.5%
4. 23.5%

Answer 1

Correct Answer - Option 2 : 22.5%

Given:

A person spends = 60% of his income

Income increase by 30%

Expenditure increase by 35%

Formula used:

Income = Expenditure + Saving

Calculations:

Let income be 100x

So, Expenditure = 100x × 60/100 = 60x

Saving = 100x – 60x = 40x

According to the question,

New income = 100x × (130/100) = 130x

New Expenditure = 60x × (135/100) = 81x

New saving = 130x – 81x = 49x

Changes in saving = 49x – 40x = 9x

Increase % = (9x/40x) × 100 = 22.5%

∴ Increase in saving is 22.5%