Given, Annual income of Ravi = Rs. x Formula: If x% increase any value, then increase value = Actual value × [(100 + x)/100] Calculation: Let Ravi’s annual income be Rs. 100 (taking x = 100) Ravi’s annual expenditure = 100 × [80/100] = Rs. 80 His annual savings = 100 – 80 = Rs. 20 His new annual income = 100 × [125/100] = Rs. 125 His new annual expenditure = 80 × [120/100] = Rs. 96 His new annual savings = 125 – 96 = Rs. 29 His annual savings increased by = 29 – 20 = 9 ∴ His annual savings increased by (in %) = [9/20] × 100 = 45%