Correct Answer – Option 1 : 120000

Given:

The rise in the income of A is 20%.

He now spends Rs. 20,000 more which is double of the previous expenditure, keeping his savings same.

Formula Used:

Ratio of Profit = ratios of product of Amount invested and time

Income – savings = expenditure

Calculation:

Let initial income be Rs. 5x

New income be Rs. 6x

Let expenditure initially be Rs. y

New expenditure = Rs. (y + 20,000)

ATQ,

⇒ y + 20,000 = 2y

⇒ y = 20,000

Since savings is same

⇒ 5x – y = 6x – (y + 20,000)

⇒ 5x – 20,000 = 6x – y – 20,000

⇒ 5x – 20,000 = 6x – 40,000

⇒ x = 20,000

His increased income = 6x = Rs. (6 × 20,000) = Rs. 1,20,000

∴ His increased income is Rs. 1,20,000