Ramesh spends 60% of his income. If his income is increased by 30% and his expenditure is increased by 20%, then the percentage increase in the savings of Ramesh will be:

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Question

This question was previously asked in

SSC Selection Post 2024 (Graduate Level) Official Paper (Held On: 20 Jun, 2024 Shift 3)

Answer 1

Given:

Ramesh spends 60% of his income.

Income increase = 30%

Expenditure increase = 20%

Formula used:

Savings = Income - Expenditure

Percentage increase in savings = \(\frac{New Savings - Old Savings}{Old Savings}\) × 100

Calculation:

Let initial income be 100.

Initial expenditure = 60% of 100 = 60

Initial savings = 100 - 60 = 40

New income = 100 + 30% of 100 = 100 + 30 = 130

New expenditure = 60 + 20% of 60 = 60 + 12 = 72

New savings = 130 - 72 = 58

Percentage increase in savings = [(58 - 40) / 40] × 100

⇒ (18 / 40) × 100

⇒ 0.45 × 100

⇒ 45%

∴ The percentage increase in the savings of Ramesh is 45%.