Raman spends 50 percent of his income. If his income increases by 10 percent and the expenditure also increases by 10 percent, then what will be the percentage increase in his savings?
Answer & explanation
Correct answer: option 3
Let income of Raman = 100x
Expenditure = 50% of 100x = 50x
Savings = 50x
New Income = 100x + 10% of 100x = 110x
New expenditure = 50x + 10% of 50x = 55x
Saving = 100x -55x = 55x
Increase percentage in saving = \(\frac{55x - 50x }{50x}\) × 100 = 10%