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A man saves 20% of his monthly salary. If an account of dearness of things he is to increase his monthly expenses by 20%, he is only able to save Rs. 200 per month. What is his monthly salary?

Correct answer: A. Rs.5000

  • A. Rs.5000
  • B. Rs.25000
  • C. Rs.7500
  • D. Rs.8500

Explanation

Saving 20% of the salary means the original expenses are 80% of salary. After a 20% increase, expenses become 80% x 120% = 96% of salary, leaving 4% as savings; therefore, 4% of salary = Rs.200, so salary = Rs.200/0.04 = Rs.5,000. The likely trap is Rs.25,000, which incorrectly treats Rs.200 as 20% of salary instead of the new 4% saving.

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Percentages express a quantity as parts per hundred and support calculations involving increases, decreases, discounts, commissions, taxes, and successive changes. Questions require distinguishing percentage change from percentage points and identifying the original value when a final value and its percentage change are given.

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