If the original income was Rs.100 and Paulson spent 75% of it, or Rs.75, then his savings would be Rs.25. If his income was increased by 20%, the new income would be Rs.120. If he also increased his expenditure by 10%, his new expenditure would be Rs.82.5.
His new savings would then be Rs.37.5, which is an increase of Rs.12.5 from the original savings. The percentage increase in his savings is 50%.