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Bhavya’s income is ₹ 50,000 per month and spends 80% of her income. Due to pay revision, her monthly income rises by 20% but due to price rise, she has to spend 20% more. How much is her new savings?

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answer is A.

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Detailed Solution

Given, Bhavya’s income is ₹ 50,000 per month and spends 80% of her income. Due to pay revision, her monthly income rises by 20% but due to price rise, she has to spend 20% more.
Her expenditure before pay revision = 80% of 50000
=

\frac{80}{100} \times 50000

= ₹ 40000
Her salary increased by 20%.
Her new salary = 50000 + 20% of 50000
= 50000 +

\frac{20}{100} \times 50000

= ₹ 60000
Her expenses after the salary rise = 40000 + 20% of 40000.
= 40000 +

\frac{20}{100} \times 40000

= 48000
Savings = income - expenditure
Savings = 60000 - 48000 = 12000
Hence her new savings are ₹ 12000.
So, option 1 is correct.

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