A person spends 40% of his monthly income. The monthly income of the person is increased by 15% and his expenditure is decreased by 22%. What is the approximate percentage increase in his savings?
Answer & explanation
Correct answer: option 1
Let total income = 100x
Expenditure = 40% of 100x = 40x
Saving = 100x - 40x = 60x
New income = 100x + 15% of 100x = 115x
New Expenditure = 78% of 40x = 31.2x
New Saving = 115x - 31.2x = 83.8x
Required percentage = \(\frac{83.8x - 60x}{60x}\) × 100
= 39.666%
= 40% (approx)