Shortcut Trick
Assume initial income = 100 units. Then expenditure = 40 units and savings = 60 units.
New income = 150 units (50% increase).
New expenditure = 40 × 1.4 = 56 units (40% increase).
New savings = 150 − 56 = 94 units.
According to the question, 94 units = ₹4700 ⇒ 1 unit = ₹50.
∴ The correct answer is ₹5000.
Alternate Method
Given:
Initial expenditure = 40% of income.
Increase in income = 50%.
Increase in expenditure = 40%.
Increased saving = ₹4700.
Formula used:
Income = Expenditure + Saving
Let the initial income be 100x.
⇒ Initial expenditure = 40x
⇒ Initial savings = 100x − 40x = 60x
⇒ New income = 100x + 50% of 100x = 150x
⇒ New expenditure = 40x + 40% of 40x
⇒ New expenditure = 40x + 16x = 56x
⇒ New savings = 150x − 56x = 94x
⇒ Given: 94x = 4700
⇒ x = 4700 ÷ 94
⇒ x = 50
⇒ Initial income = 100 × 50 = ₹5000
∴ The correct answer is ₹5000.
Additional Information
Income, Expenditure, and Saving Relationship
The fundamental equation for income-based problems is: Income = Expenditure + Savings. Any percentage change in one component affects the others based on this balance.
Percentage Increase Shortcut
To increase a value by a%, multiply the original value by (100 + a)/100. For example, a 40% increase means multiplying by 1.40.
Net Effect on Savings
If income increases by x% and expenditure increases by y%, the percentage change in savings depends on the initial ratio of expenditure to savings. Weighted averages can also be used here.