Question

Kailash used to spend 85% of his income. When his income increased by 36% his expenses also increased by 40% of his earlier expenses. How much percentage of his earning he saves now ?

Answer 1

Let the income of Kailash be ₹ x. 

Kailash spends 85% of his income. 

∴ Kailash’s expenditure = 85% of x 

= \(\frac{85}{100}\) × x = 0.85 x 

Kailash’s income increased by 36%. 

∴ Kailash’s new income = x + 36% of x 

= x + \(\frac{36}{100}\) × x 

= x + 0.36x 

= 1.36x 

Kailash’s expenses increased by 40%. 

∴ Kailash’s new expenditure = 0.85x + 40% of 0.85x

= 0.85x + \(\frac{40}{100}\) × 0.85 × 100

= 0.85x + 0.4 × 0.85x 

= 0.85x (1 + 0.4) 

= 0.85x × 1.4

= 1.19x 

∴ Kailash’s new saving = Kailash’s new income – Kailash’s new expenditure 

= 1.36x – 1.19x 

= 0.17x

 Percentage of Kailash’s new saving 

= \(\cfrac{0.17x}{1.36x}\) × 100 

= 12.5% 

∴ Kailash saves 12.5% of his new earning.