Step 1: Initial savings:
· Income = ₹16,000, Expenditure = 80% of ₹16,000 = ₹12,800.
· Savings = Income - Expenditure = ₹16,000 - ₹12,800 = ₹3,200.
Step 2: New savings after income and expenditure increase:
· New income = ₹16,000 X (1+0.20)=₹19,200
· New expenditure = ₹12,800 X (1+0.10)=₹14,080
· New savings = ₹19,200 − ₹14,080 = ₹5,120
Step 3: Percentage increase in savings:
Increase in savings = (New savings - Initial savings)/Initial savings X 100
= [(5120 - 3200)/3200] X 100
= (1920/3200) X 100
= 60%
Thus, the percentage increase in savings is 60%.
Study Notes
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