The expenditure of Sudha is 175% more than her savings. If her expenditure decreases by 12% and savings increase by 40.5%, then by what percent does her income increase?

Correct option is C

Given:
Sudha's expenditure is 175% more than her savings.
Expenditure decreases by 12%.
Savings increase by 40.5%.
Solution:
Let savings = 100
Expenditure = 100 + 1.75 $$\times$$​ 100 = 275
Income = Savings + Expenditure = 100 + 275 = 375
The expenditure decreases by 12%, so the new expenditure  = $$275 \times (1 - 0.12) = 275 \times 0.88 = 242$$​​
The savings increase by 40.5%, so the new savings = $$100 \times (1 + 0.405) = 100 \times 1.405 = 140.5$$​​
New Income = 140.5 + 242 = 382.5
​$$\text{Percentage Increase} = \frac{\text{New Income} - \text{Old Income}}{\text{Old Income}} \times 100 \\\ \\\text{Percentage Increase} = \frac{382.5 - 375}{375} \times 100 = \frac{7.5}{375} \times 100 = 2\%$$​​