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A man spends 60% of his income and saves the rest. If his income increases by 20% and spending decreases by 20%, then what is the percentage change in his savings?1). 30% increase2). 20% increase3). 40% decrease4). 80% increase |
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Answer» Let the initial INCOME of the man be Rs. X. We know that, Income (I) = Expenditure (E) + Savings (S) Initial expenditure = 60% of x = Rs. 0.6x Initial savings = x – 0.6x = Rs. 0.4x Income after increment of 20% = x + (20% of x) = Rs. 1.2x Expenditure after increment = 0.6x – (20% of 0.6x) = Rs. 0.48x Savings after increment = 1.2x – 0.48x = 0.72x ∴ % CHANGE in savings = [(0.72x – 0.4x)/0.4x] × 100 = 80% increase |
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