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A man spends 60% of his income and saves the rest. If his income increases by 20% and spending decreases by 20%, then what is the percentage change in his savings?
  • a)
    30% increase
  • b)
    20% increase
  • c)
    40% decrease
  • d)
    80% increase
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
A man spends 60% of his income and saves the rest. If his income incre...
Let the initial income of the man be Rs. x.
We know that,
Income (I) = Expenditure (E) + Savings (S)
Initial expenditure = 60% of x = Rs. 0.6x
Initial savings = x – 0.6x = Rs. 0.4x
Income after increment of 20% = x + (20% of x) = Rs. 1.2x
Expenditure after increment = 0.6x – (20% of 0.6x) = Rs. 0.48x
Savings after increment = 1.2x – 0.48x = 0.72x
∴ % change in savings = [(0.72x – 0.4x)/0.4x] × 100 = 80% increase
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A man spends 60% of his income and saves the rest. If his income increases by 20% and spending decreases by 20%, then what is the percentage change in his savings?a)30% increaseb)20% increasec)40% decreased)80% increaseCorrect answer is option 'D'. Can you explain this answer?
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