The average salary of 100 employees in an office is Rs 16,000 per month. The management decided to raise salary of every employee by 5% but stopped a transport allowance of Rs 800 per month which was paid earlier to every employee. What will be the new av

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Q: 79 (IAS/2007)
The average salary of 100 employees in an office is Rs 16,000 per month. The management decided to raise salary of every employee by 5% but stopped a transport allowance of Rs 800 per month which was paid earlier to every employee. What will be the new average monthly salary?

question_subject: 

Maths

question_exam: 

IAS

stats: 

0,3,5,2,2,3,1

keywords: 

{'new average monthly salary': [0, 0, 1, 0], 'salary': [3, 2, 3, 4], 'average salary': [0, 0, 1, 0], 'transport allowance': [0, 0, 1, 1], 'rs': [0, 0, 9, 3], 'employee': [0, 0, 1, 0], 'office': [5, 1, 2, 4], 'employees': [1, 0, 5, 5], 'management': [2, 0, 4, 9], 'month': [9, 0, 7, 1]}

The average salary of the employees is currently Rs 16,000. If the management decides to raise the salary by 5%, that would mean each employee now gets an increase of 5/100 * 16,000 = Rs 800. So, the salary increases to Rs 16,000 + Rs 800 = Rs 16,800. However, the employees used to get an additional transport allowance of Rs 800, which is now stopped. Therefore, even after the salary hike, the overall income remains Rs 16,800.

Option 1, Rs 16,000 is the original salary without considering the increase or the stopping of the transport allowance. Option 2, Rs 16,500 is incorrect as it doesn’t properly calculate the 5% increment. Option 4 suggests that data is insufficient, but we have all the necessary data to find the solution. Therefore, option 3 Rs 16,800, is the correct answer as it correctly calculates the new salary after considering the increment and the stoppage of transport allowance.