Latest GMAT Aptitude Question SOLUTION: A man spends 75% of his income, when his income is increased by 20%, he increases his expenditure by 10%. By how much per cent are his savings increased

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(#M40000252) GMAT Numerical Ability question Keep an EYE

A man spends 75% of his income, when his income is increased by 20%, he increases his expenditure by 10%. By how much per cent are his savings increased

Solution

Let the income of the man = x
then expenditure = 0.75x and savings = 0.25x
now after 20 % increment income = 1.2x and with 10 % increment in the expenditure it will be 0.75x*1.1 = 0.825x
so savings = 1.2x - 0.825x = 0.375x
so new % of savings relative to new income = (0.375x/1.2x)*100
= 0.3125*100 = 31.25 %

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Asked In GMAT neeraj (14 years ago)

Solved Renjith C G Read Solution (6)

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Read Solution (6) :

Mohammad Younis Malik  (10 years ago)

Let income = 100, exp = 75, sav = 25
Now, New income = 100 + 20%(100) = 120
New Exp. = 75 + 10%(75) = 82.5
New Sav. = 120 - 82.5 = 37.5
% increase in savings = (12.5/50)x100 = 50%

Is this solution Helpfull? Yes (12) | No (3)  

C.T.Narayanan  (14 years ago)

50%

Is this solution Helpfull? Yes (8) | No (4)  

VIVEK KUMAR  (9 years ago)

INCOME1=100 ,EXPENDITURE1 =75 SAVING1=25
INCOME2=120,EXPENDITURE2=82.5,SAVING2=37.5
DIFFERENCE IN SAVING=37.5-25=12.5(+VE)
% INCREASE IN SAVING=50%

Is this solution Helpfull? Yes (4) | No   

Rahul Ghosh  (5 years ago)

Let income = 100, expenditure = 75

as income=savings + expenditure
also, savings=income - expenditure
therefore, initial savings = 100 - 75 = 25

Now, New income = 100 + 20%(100) = 120
New Exp. = 75 + 10%(75) = 82.5
New Sav. = 120 - 82.5 = 37.5

Increase in savings = new savings - initial savings = 37.5 - 25 = 12.5
% increase in savings = (12.5/25)x100 = (25/50)x100 = 50%

ps: I just took note from other's answers and expanded it for clear calculations. hope this helps. and thanks others who answered as I was finding ans for this qn as well.

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Renjith C G  (14 years ago)

get decreased by 28%

Is this solution Helpfull? Yes | No (7)  

dilip reddy  (6 years ago)

i din understand the last step sir

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