A spends 80% of her income. When her income is increased by 30%, she increases her expenditure by 30%. By what percentage are her saving increased or decreased?
1. Decrease of 30%
2. Increase of 50%
3. Decrease of 50%
4. Increase of 30%
1. Decrease of 30%
2. Increase of 50%
3. Decrease of 50%
4. Increase of 30%
Correct Answer – Option 4 : Increase of 30%
Given:
Percentage of expenditure = 80%
Increment in income = 30%
Increment in expenditure = 30%
Solution:
Let the income of A be 100
⇒ Expenditure = 80% of 100 = 80
⇒ Savings = 100 – 80 = 20
When income increased by 30%
⇒ New income = 100 + 30% of 100
⇒ New income = 100 + 30 = 130
When expenditure increased by 30%
⇒ New expenditure = 80 + 30% of 80
⇒ New expenditure = 80 + 24 = 104
⇒ New savings = 130 – 104 = 26
Increment in savings = 26 – 20 = 6
⇒ Percent increment = 6/20 × 100
⇒ Percent increment = 30%
∴ The savings are increased by 30%