Question

Due to global recession starting in January, Ram’s monthly salary of Rs. 8000 was cut by 10%. The monthly expenses, which were Rs. 6000, increased at the rate of 5% per month. Since which month will he have no savings if the recession lasted for a year ?

• A. April
• B. March
• C. May
• D. June

Answer 1

Answer: (C)

May

Answer 2

In the month Jan:
Rams's monthly salary in Jan = 0.9 × 8000 = 7200
Expenses = 6000
In the month Feb:
Expenses = 6000 × $\frac{105}{100}$ = 6300
In the month March:
Expenses = 6300 × $\frac{105}{100}$ = 6615
In the month April:
Expenses = 6615 × $\frac{105}{100}$ = 6945.75
In the month May:
Expenses = 6945.75 × $\frac{105}{100}$ > 7200
So, In the month of May he will not have any savings left if the recession lasted for a year.
The correct option is (C)