Key Concept: Data Sufficiency — Algebraic Sufficiency vs. Assumed Insufficiency
Quick note on the existing answer: I get why (E) feels right here — it looks like we don't have enough info about actual savings. But let's work through the algebra carefully, because this question has a neat hidden sufficiency.
Set up variables:
Let I = previous month's income, E = previous month's expenses
Old savings = I − E
The question asks: Is New Savings ≥ 1.2 × Old Savings?
Statement (1) alone: Income increased 20%. No info on expenses → savings unknown. Insufficient. ✗
Statement (2) alone: Expenses increased 10%. No info on income → savings unknown. Insufficient. ✗
Statements (1) + (2) together:
New income = 1.2I
New expenses = 1.1E
New savings = 1.2I − 1.1E
We need to check: Is 1.2I − 1.1E ≥ 1.2(I − E)?
Step 1 — Expand the right side:
1.2I − 1.2E
Step 2 — Compare both sides:
Is 1.2I − 1.1E ≥ 1.2I − 1.2E?
Step 3 — Subtract 1.2I from both sides:
Is −1.1E ≥ −1.2E?
→ Is 0.1E ≥ 0?
Since expenses E must be ≥ 0, this is always true. The answer is definitively YES, regardless of the actual values of I and E.
Answer: C — both statements together are sufficient.
The trap: The instinct is to say "we don't know actual income or expense values, so (E)." But DS doesn't require you to calculate a specific number — it only needs the yes/no question to be determined. Here the algebra proves the answer is always "yes," which makes (1)+(2) sufficient.
Takeaway: In DS yes/no questions involving percentages, always try the algebra first — sometimes the variables cancel completely and give you a result that's always true (or always false), making the statements sufficient even without specific values.