If out of 40 employees who are paid the same 25 got a salary hike of 20% and the other 15 got a salary cut of 30%, find the total change in company’s expenditure in relation with the salaries of these 40 employees.

Correct Answer: 1.25% increased
Let the initial salary of the employees be 100 per employee The initial expenditure of the company in terms of the assumption = 40 * 100 = 4,000 Increment in the salaries = 20% = 100 + 20% of 100 = 100 + 20 = 120 25 employees got a revised salary of 120 units. Decreased salaries = 30% cut A cut of 30% = 100 – 30% of 100 = 100 – 30 = 70 15 employees got a revised salary of 70 units. The total of new expenditure of the company = 25 * 120 + 15 * 70 = 3000 + 1050 = 4050 units Total change = 4050 – 4000 = 50 units increased Percentage change = 50 / 4000 * 100 = 1.25% increased