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    Question

    The ratio of income and expenditure of a person is 7 :

    5, respectively. If the income and expenditure of the person are increased by 20% and 12% respectively, then find the percentage increase in the savings.
    A 30% Correct Answer Incorrect Answer
    B 35% Correct Answer Incorrect Answer
    C 40% Correct Answer Incorrect Answer
    D 45% Correct Answer Incorrect Answer

    Solution

    Let the income of the person be Rs. ‘7x’ So, expenditure = Rs. ‘5x’ So, savings = 7x – 5x = Rs. ‘2x’ New income = 7x × 1.2 = Rs. ‘8.4x’ New expenditure = 5x × 1.12 = Rs. ‘5.6x’ New savings = 8.4x – 5.6x = Rs. ‘2.8x’ So, required percentage increase = {(2.8x – 2x) / 2x} × 100 = 40%

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