Discussion

A man spends 75% of his income. His income increases by 20% and his
expenditure also increases by 10%. The percentage of increase in his savings is

Answer: C

The income of person be Rs \(y\)

So his expenditure be 75% of income which is \(= 0.75y\)

Saving \(= y- 0.75y = 0.25y\)

Now after increment of 20 % in income the new income becomes \(= 1.2y\)

Given that bew expenditure is 10% more than previous one.So , new expenditure is \(= 1.1 \times 0.75y = 0.825y\)

New savings \(= 1.2y - 0.825y = 0.375y\)

Percentage increase in savings \(= \frac{0.375y-0.25y}{0.25y} \times 100 = 50%\)

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