Madhu's income is RS 12000 per month . She pays 20% tax on monthly income above Rs 2000 and she spends 30% of the remaining income. How much does she save annually
To find out how much Madhu saves annually, we first need to calculate her monthly income after deducting taxes and expenses.
Step 1: Calculate Monthly Income after deducting taxes
Madhu's monthly income is Rs 12,000. She pays 20% tax on income above Rs 2,000.
Her income above Rs 2,000 = Rs 12,000 - Rs 2,000 = Rs 10,000.
Tax on income above Rs 2,000 = 20% of Rs 10,000 = 0.2 * Rs 10,000 = Rs 2,000.
Monthly income after deducting taxes = Rs 12,000 - Rs 2,000 = Rs 10,000.
Step 2: Calculate Monthly Expenses
Madhu spends 30% of her remaining income after paying taxes.
Expenses = 30% of Rs 10,000 = 0.3 * Rs 10,000 = Rs 3,000.
Monthly income after deducting taxes and expenses = Rs 10,000 - Rs 3,000 = Rs 7,000.
Step 3: Calculate Annual Savings
To calculate annual savings, we multiply the monthly income after deducting taxes and expenses by 12 (number of months in a year).
Annual savings = Rs 7,000 * 12 = Rs 84,000.
Therefore, Madhu saves Rs 84,000 annually.
To find out how much Madhu saves annually, we need to calculate her monthly savings first.
Step 1: Calculate the monthly income after tax deduction
Madhu's monthly income after tax deduction can be calculated by subtracting the tax from her total income.
Tax amount = 20% of (Monthly income - Rs 2000)
= 20% of (Rs 12000 - Rs 2000)
= 20% of Rs 10000
= 0.2 * Rs 10000
= Rs 2000
Monthly income after tax = Monthly income - Tax amount
= Rs 12000 - Rs 2000
= Rs 10000
Step 2: Calculate the amount spent by Madhu monthly
Madhu spends 30% of her remaining income after tax.
Amount spent monthly = 30% of Monthly income after tax
= 30% of Rs 10000
= 0.3 * Rs 10000
= Rs 3000
Step 3: Calculate the monthly savings
Monthly savings = Monthly income after tax - Amount spent monthly
= Rs 10000 - Rs 3000
= Rs 7000
Step 4: Calculate the annual savings
To find out the annual savings, we need to multiply the monthly savings by 12 since there are 12 months in a year.
Annual savings = Monthly savings * 12
= Rs 7000 * 12
= Rs 84000
Therefore, Madhu saves Rs 84000 annually.
20% of (12000-2000) = 2000
30% of the remaining 10000 is 3000
so now you can see how much she saves monthly, and thus can figure the annual savings.