Explanation:

- Let's say A's initial income is $100.

- He saves 20% of his income, so he saves $20 and spends $80.

- His income increases by 25%, so his new income is $125.

- He increases his expenditure by 25% of old expenditure, meaning he now spends $100.

- His new savings are now $125 - $100 = $25.

- Previous savings were $20, new savings are $25.

- The change in savings is $5, from $20 to $25.

- Percentage change in savings is $$ \left(\frac{5}{20}\right) \times 100 = 25\%$$.

- Therefore, the percentage change in his savings is 25%.

Option:2, 25%

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