The monthly salary of a person was ₹50,000. He used to spend on three heads- personal and family expenses (E), taxes (T), philanthropy (P), and rest were his savings. E was 50% of the income, T was 20% of E and P was 15% of T. When his salary got raised by 40%, he maintained the percentage level of E, but T became 30% of E and P became 20% of T. By whatpercentage is the new savings more or less than the earlier savings? (correct up to one decimal place)
Answer & explanation
Correct answer: option 4
Let total income of person be 100
E = 50
T = 50 × \(\frac{20}{100}\) = 10
P = 10 × \(\frac{15}{100}\) = 1.5
His savings = 100 - 50 - 10 - 1.5 = 38.5
His new salary = 100 × \(\frac{140}{100}\) = 140
E = 140 × \(\frac{50}{100}\) = 70
T = 70 × \(\frac{30}{100}\) = 21
P = 21 × \(\frac{20}{100}\) = 4.2
New savings = 140 - 70 - 21 - 4.2 = 44.8
His savings increased by = 44.8 - 38.5 = 6.3
His savings increased by (in%) = \(\frac{6.3}{38.5}\) × 100 = 16.4% more