A person earns Rs 16,000 per month and spends 80% of his income and saves the remaining amount.

A person earns Rs 16,000 per month and spends 80% of his income and saves the remaining amount. If his income increases by 20% and expenditure by 10%, find the percentage of increase in his savings.

Options
a) 140 %
b) 90 %
c) 60 %
d) 120%

Solution

As per question
Income = 16000
Expenditure = 80%
Saving = 3200
Expenditure = Income x Expend.%
Expend. = $\frac{16000 \times 80}{100}$
Expend. = 12800
Saving = 16000 – 12800 = 3200
If his income increases by 20% and expenditure by 10%
Income = $\frac{16000 \times 20}{100}$
Income = 3200
New Income = 16000 + 3200 = 19200
Expend. = $\frac{12800 \times 10}{100}$
Expend. = 1280
New expend. = 12800 + 1280 = 14080
New saving = New income – New expend.
New saving = 19200 – 14080 = 5120
Increase in savings = 5120 – 3200 = 1920
% increase in savings = $\frac{1920}{3200} \times{100}$ = 60%