A spends 65% of his income. His income is increased by 20.1% and the expenditure is increased by20%. By what percent (correct to one decimal place ) does his saving increase or decrease ?
Answer & explanation
Correct answer: option 1
Let, the income = Rs. 100x
So, Expenditure = Rs. 65x
Savings = (100x - 65x) = 35x
His new income = 100x + (20.1% of 100x) = Rs. 120.1x
His new expenditure = 65x + (20% of 65x) = Rs. 78x
The new savings = 120.1x - 78x = Rs. 42.1x
The gain percentage of savings =\(\frac{42.1x - 35x}{35x}\) × 100 = 20.28%
= 20.3% (correct to one decimal place)
∴ His saving increases by 20.3%