The ratio of income and expenditure is 6 ∶ 5. Income increases by 40% and expenditure decreases by 20%. If the initial expenditure is Rs. 4,50,000. Find the final saving (in Rs.)

Correct option is A

Given:

Ratio of income : expenditure = 6 : 5

Initial expenditure = ₹4,50,000

Income increases by 40%

Expenditure decreases by 20%

Concept Used:

Saving = Income – Expenditure

Formula Used:

Initial income = $$\frac{6}{5} \times$$​ Expenditure

Final income = Initial income × 1.40

Final expenditure = Initial expenditure × 0.80

Final saving = Final income - Final expenditure

Solution:

Initial income = $$\frac{6}{5} \times 4,50,000$$​ = ₹5,40,000

Final income after 40% increase

= 5,40,000 × 1.40 = ₹7,56,000

Final expenditure after 20% decrease

= 4,50,000 × 0.80 = ₹3,60,000

Final saving:

= 7,56,000 - 3,60,000 = ₹ 3,96,000