Multiple choice

A man spends 80% of his income and saves the rest. If his income and spending both increase by 10%, then what is the percentage change in his savings?

  1. 10% increase

  2. 5% decrease

  3. 5% increase

  4. 15% decrease
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A Correct answer
Explanation

Let income be 100, spending 80, and savings 20. New income is 110, new spending is 88 (10% increase of 80). New savings = 110 - 88 = 22. The increase is (22 - 20) / 20 = 10%.

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