Question

Sahil spends 75% of his pocket money and saves the rest. His pocket money is increased by 25% and he increases his expenditure by 20%, then the increase in saving in percent is:

1. 15%
2. 20%
3. 40%
4. 10% 
5. None of these 

Answer 1

Correct Answer - Option 3 : 40%

Formula: 

Income = expenditure + savings

Percentage = (Actual/Total) × 100

Calculation

Let the income of Sahil be 100x 

According  to question,

Initial →  Income : expenditure : saving

                  100    :       75          :    25

Finally,

Income = 100 × 125% = 125x

Expenditure = 75 × 120% = 90x 

So, the saving will be 125x – 90x = 35x

Increase in saving = initial saving – final saving = 35x – 25x = 10x

Hence, the increase in saving = 10x × (100 / 25x) = 40%

∴ The required answer is 40%