Kalyan spends 80% of his income. His income increases by 15% and his expenditure also increases by 5%. What is the percentage increase in his savings?

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Accepted Answer

Let Kalyan's initial income be Rs. 100.

Initial expenditure = 80% of 100 = Rs. 80
Initial savings = Income - Expenditure = 100 - 80 = Rs. 20

After increase:
New income = 100 + 15% of 100 = 100 + 15 = Rs. 115
New expenditure = 80 + 5% of 80 = 80 + 4 = Rs. 84
New savings = New income - New expenditure = 115 - 84 = Rs. 31

Increase in savings = 31 - 20 = Rs. 11
Percentage increase in savings = (Increase / Original savings) × 100 = (11 / 20) × 100 = 55%

However, let's check the options. 55% is given as option 3, but let's double-check the calculation:

Initial savings: 20
New savings: 31
Increase: 11
(11/20) × 100 = 55%

So, the correct answer should be 55% (option 3), not 40%. The correct option is option 3.

Final answer: 55% (option 3).

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