Paulson spends 75% of his income. His income is increased by 20% and he…
2024
Paulson spends 75% of his income. His income is increased by 20% and he increased his expenditure by 10%. Find % increase in his savings?
- A.
50%
- B.
45%
- C.
25%
- D.
12.5%
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Correct answer: A
Solution: Compute initial and new savings using a convenient income value.
Let income = 100. Initial expenditure = 75, so initial savings = 25.
Income increases by 20%: new income = 100 × 1.20 = 120.
Expenditure increases by 10%: new expenditure = 75 × 1.10 = 82.5.
New savings = new income − new expenditure = 120 − 82.5 = 37.5.
Increase in savings = 37.5 − 25 = 12.5, which as a percentage of the original 25 is (12.5/25) × 100 = 50%.