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The average salary of 100 employees in an office is Rs.16,000 per month. The management decided to raise salary of every employee by 5% but stopped a transport allowance of Rs.800 per month which was paid earlier to every employee. What will be the new average monthly salary?

(a) Rs.16,000

(b) Rs. 16,500

(c) Rs.16,800

(d) Cannot be known since data are insufficient

1 Answer

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Best answer

(c) Since, salary of each employee is increased by 5%,

so net average increase in salary = 5%.

∴ New average monthly salary

As transport allowance is not a part of the salary, so deduction of Rs.800 will have no effect on the new average salary.

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