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A person spends 60% of his income. If his income increases by 15% and expenditure increases by 5%, then find percentage change on his savings?

Question

A person spends 60% of his income. If his income increases by 15% and expenditure increases by 5%, then find percentage change on his savings?

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Solution

Sure, let's solve this step by step:

  1. Let's assume the person's initial income is 100 units. According to the problem, the person spends 60% of his income, so his expenditure is 60 units and his savings are 40 units (100 - 60).

  2. The person's income increases by 15%, so his new income is 115 units (100 + 15% of 100).

  3. His expenditure increases by 5%, so his new expenditure is 63 units (60 + 5% of 60).

  4. Now, his new savings are his new income minus his new expenditure, which is 52 units (115 - 63).

  5. To find the percentage change in his savings, we subtract his initial savings from his new savings, divide by his initial savings, and then multiply by 100. So, the percentage change in his savings is ((52 - 40) / 40) * 100 = 30%.

So, there is a 30% increase in his savings.

This problem has been solved

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