A man spends 60% of his income and saves the remaining. His income increases by 18% and his expenditure also increases by 30%. Find the percentage increase in his savings.
Answer & explanation
Correct answer: option 4
Assume present income be P
Expenditure is 60% E = 0.6P
Savings = 0.4P
Increased income is 18% P' = 1.18P
Increased Expenditure to 30% E' = 1.3E = 1.30*0.6P = 0.78P
New Savings = 1.18P - 0.78P = 0.4P
The correct answer is Option (4) → No change