A man spends 65% of his income. His income increases by 20% and his expenditure also increases by 10%. The percentage of increase in his savings is ________.
Answer & explanation
Correct answer: option 1
Let income = 100x
expenditure = 65% of 100x = 65x
& saving = 100x - 65x = 35x
Increased income = 100x + 20% of 100
= 100x + \(\frac{1}{5}\) × 100x = 120x
increased expenditure = 65x + 10% of 65
= 65x +\(\frac{1}{10}\) ×65
= 71.5x
New saving = 120x - 71.5x = 48.5x
increased percentage of saving = \(\frac{13.5x}{35x}\) × 100% = 38.5%