Question : A man spends 75% of his income. If his income increases by 28% and his expenditure increases by 20%, then what is the increase or decrease percentage in his savings?
Option 1: 52% decrease
Option 2: 52% increase
Option 3: 13% decrease
Option 4: 13% increase
Correct Answer: 52% increase
Solution :
Man spends 75% of his income.
Income increases by 28%
Expenditure increases by 20%
Let the Income of a man be 100.
Expenditure = 75% of 100 =
Saving = Income – Expenditure
Initial saving = 100 – 75 = 25 --------------(1)
Now as per the question,
His income increased by 28%
His new income = Old income + 28% of Old income
His new income = (
Similarly, his expenditure increased by 20%
His new expenditure = (
His new expenditure = 90
Saving(new) = income(new) – expenditure(new)
Saving(new) = 128 – 90 = 38 -------------(2)
Now, percentage increase in savings =
= 13 × 4 = 52%
Hence, the correct answer is 52% increase.