‘The concept of simple interest and compound interest 'S ‘one of those concepts which are widely used in Business and Hanking ete. Questions are rarely asked in CAT from this chapter. but it is important for the purpose of Data imerpretation. Since the questions based on the concept of ‘imlerest” are rather easy sn itis common that MAT, FMS, CET te, asked enough questions from this chapter. The questions of this chapter are so easy that 95% questions can be solved orally oF using unitary methods e., sometimes you don’t need to apply the given formula and I think that is essential. Simple interest is nothing but the fix percentage of the principal (investedborrowed amount of money) Some key words ised in the concept of intevest. Principal :(P) It is the sum of money deposited/loaned ste, also known as capital Interest : It isthe money paid by borrower, calculated on the basis of Principal. Time (Zn) : This is Use duration for which money is lenvbarrawed. Rate of Interest (r/R): Its the rate at which the interest is charged on principal, Amount (4) = Principal + Interest Simple Interest : When the interest is calculated Uniformly only on the principal forthe given time period. ‘Compoitid Interest: In this case for every next period of fime the interest is charged on the ttal previous amount (hich js the sum of principal ard interest charged om it so far) ie, every tinte we calculate miccessive increase in the previous amount imple Interest (SI) Sie PX OKT 100 P= Principal r= rate of interest (in %) ‘=time period (yearly, half yearly ete.) Prt Am (Aer +o = Ld unt (4) = P+ out) CI/SI/INSTALMENTS ofthe tive variables ASL. F.fwecan tng Ca ees tne requisite Information. aoa CONVERSION OF TIE PE Given (2) ven (7°) Reauited (7) Big, Pieannaal rycen S(M)halE Seay y sancual —¢yeirs 5. quaerly 2 annual = years * monthly " Messed n boy Compound interest (Ci) LC1=A-P [dis the amount including intrest at principal (P} both) 2. Amount (4)=P(1+_" yorunnt ( A) (im) 3. When rate of iiterest is half-yearly 21 a of) 100 4. When the rate of interest is quarterly — anP[ls ) 100 Difference between Cl and SI for two yeuls 2 (nto in ron yeu ( F) 100 Difference between CI and SI for three yes 2 =°( =) t+) 100 100 2 tio ; Ibis known that the pes ofS {Sirsiatesin their values over atime period: Wests fede MTENCY decreases, we say that the valued! 8 depreciating. vetlel a 5Pere: gal value of the article 1 7 cepeeate) Valve Of article 17g ate of Interest by Which the 18 Ter the time period * 7", % hasbeen observed thatthe Price Of antici Si! Peivnation elt, increases Ptleion of sy over tS PREVIOUS Value Le, iq ip, decreases Fal interest for the my FRASER gE ; ney. Th po aabe forthe calculation of poputaien, "ME Me _ ry earpalicnl P= Pa[ 19 EY when pepulation increas jes population) P = ma (te when population decreases inintments : Whon a borrower paid the stam in parts satin single amount) then we say that he/she is paying in snes For example A borrowed Rs. 100 trom J and he sooucitio. Bin several parts Le., Rs, 20 in 5 times or Rs. 50 nes ett. But the important point is that borrower has to sp ie iierest for using the borrowed sum/or purchased ‘ale ngeneral the valve of each instalment is kept constant savien the Interest charged on each instalment vary for scidalent. xerK 2) For Simple Interest ele estae ‘uno gy. Pre _ i000 12 semrenii 2100. 100 ‘Nhthamount:=P + st 1000 + 600=Rs. 1600) adie int ae e peed x + ris the value of each instalment. ‘Total amount paid in intaliments (4) = P| is the number of instalments. Difference between Cl and SI fora" year 4 1 7 For Compound Interest increase in amoont'in a year 100. increase in amownt in (n+1}° year (100 +r} Similarly, decrease in amount inn" year _ 100 _ Geerease in amount in (m+i)" year ( where ris mate of interest. ‘p onbd everytime saving if we do I BY NRIAEY sloon As, 1924 ie interes Yor 4 years So, fs. 48 tbe iterest for 1 year Iemeans Rs, 144s the interest for years at acti prints Principal «1344-144 = Rs 1200 TeKAMPLE 5, A certain sum of money amounts to Ri. 15900 0% ‘simple rate of interest ar 6% p.a in I year. What is the value of Principal sum? fa) 12000 (6) 18090 fe) 15000 (a) 14000 4 SOLUTION Best way is to go through option oa 15000 «641 gg 100 So the toral amount ~ 15900, hence (c) is correct, FEXAMPLE 6. A sum of money becres 5 mes i 12 yrs. how many years i wil decane 5 test the saree rae of simple inerest? (a) 20 years th) 16 years ©) 24,ye0r: (4) 30.years 1 10.25% FEXAMPLE 11. Rs. 1000 i bemg charged at SOs por Som What is the interest for 3” year at compoused interest ? if fa) 1122) 1025) TS SOLUTION Total amoune for two years = 1000 (1.5) = 28 2250 6 5001 _ Now, interest for third year = 2B (a) Rs. 2000 200 (2) Rs, S00 a a od ‘SOLUTION 220 200= 20 2s +t Ses 2purchased a maruti car 3 yearg k qroived eA YOO B 25% D0, Wye mediference between Cland Si for Ee Whar sth principal lent in each cae (b) iss ls) (er 3)-ase v(a)(s)-s a7 @ 20%, ot 8 (@ none of these between Cl and $1 for 3 years = Re, 15g P=952545=11875 100 _ 100 5. “io0+7 120° 6 furle 16. Asum is Being lent at 20% p.a. compound inserest. isis cies ent or ms SY. TB Wo Wehcatt no mn, 20786 tn 8 peor at, hom ety = ah op AY * The bee yt: ts this problem iso 12000 : "ea PLE i, 10M pac A rth moons CO Re coat Onrmaly. Whee tine ving eee ae bel of prin? 25 M4002 1728012 = aor ae @) Rs 12000 . 060 (4 ta ieny ion dasa voli 20) 100. gt (18) pairs = 10009 & EXAMPLE 19,4 sum af Rs. 10000 borrowed! aie pa Fompownde anaualy which is poli back in 3 equal akuat Imalments, What isthe amount ofeach insciments? 4 ~(2-2)-@) Alternatively + 10000 (08) = x11 + 1.06) + €1.987) = x= 880305 PLE 20, A scooy is slit by an automobile agency fer Cae ee otek ore pa ne fe qual monte. he ie of tere chara ht ampary i 12% per on fc ac nen, at SOLUTION Balance of the price to be pal throw insaiments =e 14900 ‘pate of interest (r) = 1200p 5) im » {san a [tle al ofa a2) w+(e+ B58) iam)" 96:7, hye 8 the al of each init a nce earn pth calculation 10 the of om oe coh [fect274 For Rs. 100, amount afterone year | after 2 years after 3 years 115.7625 Rate of Interest after 4 years 121.550625 5% x 119.1016 126.247696 8% 125.9712 136.048896 10% 133.1000 146.4100 161.05) 12% 140.4928 157.351936 15% 152.0875 174.900625, 201.135719% 206 172.80 207.36 248.832 a 195.3125 244.140625 308.1757H105 219.70 285,61 371.293 1 337.50 506.25 759.375eit est TRE AMUOUDE Paid By the m; Pe (b) Re 4800 (@) Rs. 7000, wpe time period far which fs, pn 20% pa of simple interese? Ceo (b) 25 years oppo (4) 6 years, suede me of snp nterest at which Rs. 14,090, 1 A000 ives fs. 1960 tn KWo years? — () 5% td) 10% ,abrsthecam of amount which gives Rs. 6300 ay meen hee annum of simple interes in 7 2 years (ty 24000 (a 12000, | Sacre of simple interest és 129% per annum, the amount te voul fetch interest of Rs. 6000 per annus is - li Bs 7200 (D) Rs. 48000 (a) Rs, 72000, ft tscrons po at simple interest at a certain rate for 2 years, Jalitbeen put at 4% higher rate, i would have Jetched fs mm, The sum is : 8000 amounts to, 120 (o) 1400 ime (@) 8000 ‘Ot time will a sum of money double-inselt @ 20% per ‘=n (p..) simple interest? 0 0 years (b) 5 yearr yes td) 4 years *4°Speramium a sum doubles after 20 years, The rie of Re per annum is fe (b) 5% hg (@) 10% 4 money tries (ie, 3 times) in 1 years at raat ‘Ss ineres per annus, What isthe vate of 7? 40 om Oe (a) can’t be decermined sna doubles le how many years Lohan cemesteed ia sear % “(b) 18 years ie fem! in “~ mt, ‘at 5% ST and the oF wie men cepa afer 3 year ‘part after # years, en 1s 4000 and pay back tr 5 year ac 545 a ie: 13, as, 14, 16. at 18: a) 250 fe) 135 ‘Asm oF Rs, 75005 tent ta in TWO parts one aE 1216 pa and be to anol income (@) 1300 ‘pit Hem Rs. 6000 to Halo Far 2 years and, 1800 sean Fou 4 yesce ara we ests aril necciwed altogether from bath Re 900 as Simple imerest. ‘he yates kitereat |e (a 9% 1) ie (© 10% ta} 535 ‘A.Petoon rakes a loan of Rs. 200 at Sh senple interest. Hie eet 3. 100 ar the end of oie year, tn ore! to dear his dus it the end of 2 yesrs, he would pay (a) 12550 110 fo) 115.50 fd) noe of these ‘Aends 4 sum af omey for 10-year at $4 $1 3 bends double the amount for § yer atthe same rate af interest. Which a the following stacements itr in this regan? {@) A wll get twice the amount of iene that 8 wok get {0} B will get re tne amaust of interes: that A would get (€) A wll. get the samme amioune ofimetest that Bwould get (cd) il ee four teste amon fineees chat A woul pet ‘Consider the fllowing satememt. fa money is loued a sole interest then the (0 maney gets doubled in 5 years if the rate of terest ix 163 4) money pets doubled in 5 years Wf the tate OF interest is 0% (ii) money heronies four lnes ia 10 years ft gets doubted in5 years ‘of hese statements * ta), (D ana (Jd) are correct fo}. i) alone is coer: {(€) (i) alone 8 cormcet 4). (i) ana i) ane correct Pratibha invest an amount of Ks. 15,860 in the names of her three daughters A.B and in such a way that they get tbe faine interest er 2, $ and 4 years respectively, Ifthe rate of Simple interest i 5% pa, then the ratio of the amounss invested among A, B and ¢ will be: (a) 5:10:12 Ot ' (9 6:78 bathers ‘annual payment wil diicharge x debt af Rs. S80 in 65 yoars, che rate Detng 6M pa? cease (b) 100 6) 80 (d) 78276 during, the 49, fad the aout 2500 ined at 184 Perio fram 4 February, 2005 t0 28 Ai (2) Rs. 3000. 1) Rs 3500 (2 Ra, 3960 (i) be 2600 - 20, Find the amount of Rs: 1700 invested at 1696 half yeasty simple interes for one yea! a) 2100 @) 2244 fer 2an0 ts) 2500 21. Thecompound interest on Rs, 1000 ne 10% pa. in 3 years is (s) a1 Ge) 2331 (om 6a 300 2 22. ‘The compound interest on fs, 10000 at 20% pa, int years (a) 10736 736 é) 2076 tu) 7290 23. The compound interest an Rs. 4000 ut 25% pus. in 3 years fal 1235 (b) seas {c) aai25 (i) 3750.5 24, ‘The compound interest on Rs. 5000 at 30% per num For 4 years a) aan ‘i 6700 fo) 92805 ed) 3457.5 25. A.sum of Rx 400 would brecwe Re. 44) after 2 years at 15 ‘nmpotind incovest, find the value ofr (a) 10% (b) 5% (© 198 (2) 2005 26: At compound intérest,ifa certain sum of money douhles in ‘year, then the amount willbe fou fed a: (a) n° years (b) n* years (©) nyears (a) a years 37. Rs. 6000 amourns to Rs. 7986 tn J years at Cl. The rate of nceres a 20% hy 10% 2% (7.5% 34, The least archer cf complete years ia which x sum of money Pt 20% Cr wil be mote than doubled is: (a) 4 ms os a8 29, The Clon Rs. S000 for 3 years at for Fst year, 10% for second year and 129% for third year will be fa) Rs.1750 (b) Rs. 1652.80 (0) Re. i575 (@) Rs. 1685.20 90. ‘Asam of Rs. 2400 deposited Cl, doubled her $year, 20 yeurs i wl Became ; " oH (a Rs. 24000, (b) Rs, 38409 (© Rs. 19200 (2) can’t be determing, le Arum oF Rs. 550 was taken aa Ioan. This fo he ‘Cwc-equal annual instalments Hin ae of ime ane {ar peli! sess then the value ofeach ingen egs {a 300 ae i es “sn (4) none of these dlferonce berwren C2 and St 2st a 105s, The su gn A MOREY eo fe oy {© 4000 (8) none 33. The attterence a 2. 600 for a} 120 —— a. as. a7. Amit borrowed R& B00 at 10% rate of insures 8, A sonata watch sll foe RS: 440 cach ot 40, Abhinav purchases a wack suit for Rs. 2400 cash art ‘41. Indicam cel- phate ii available for Rs. 2500 cas ct mo Csi a sinounis to RE. 8988 yt! ‘A commsin oe ia hee FEATS, ot coe Ma, NE Bin y Peta fs 52 the principal and Tate of inne oan A a 12,000. 5% ) Rs. 6.000, a0 Ge (3 ps 8.000, 6% 2) RS 10.00 g, ; eo pampound inerest ant the simple ites . Te eqn sum of EY A 4 ceria yg hy * fas, Ro 2100 respecte NN nt: “ ; a () 7300, 9% 2 (3 9000, 1098 (4) 7000, 15%, , compound tert 00 8 ean Sum 3g rs ‘Bove forthe second yer andthe yar gg stg fs, 29058 respectively. What the rate ofimag, ah afé BS (b) 1295 (a): oe (a) 1596, (o) 10% 5 te ‘400 at che end of fst year. Whar isthe ang’ to pay at te exd of vecand year to dscharye ts twat calculated at compound interest? (a) 420 (by 440, (g 40 (ad) 528 it dona paca oper wih Rr Saw ead month, Pind the rate of interest charged in the —~ a) 10% (b) 5%6 a fe) 208 @) 25% 39, A cellphone is available for Rs. 600 or for 400 cai inf 4% M payment cogether with Rs. 260 to be paid afer nomen] . Find the rate of interest charged under this share (4) 20% (by St% ei () 1208 (4) none of tese - 1000 cash dewn payments: and. two moat in ‘Rs. 600 each. Find the rate of interest ka} 75% (b) 120% dade (2). noe of these Gash down: payments. followed by 4 cqul 2 instalments, i the rate of interest charged ic 15% fo 25 caleulate the 3 a (@) $59, (4) nome of these on 55 equal monly insane 1 Pay cee Bet is ABW pa, compute 8} 03.0 (©) 75.09% Be EEMBSFRS. S000 woe id ck in oc ImnEES. Hove much ts each nce ‘@) Bs. ae 418 4% per anmum compounded SSOP ere SEFi Pas Se ae 0 be nai, ‘at y oat Pet instalments. the interes 8 Beck a3 hall 0, Pounded Peay ty BF oe! yg, per annum, how much ig tea y sath instalmenes er 0) 3150 mt? (a) 5052 some money on compound S22 cu the yen im equal anna! instal ya Ye Forere is 15% per anmam ana anna sm Sa, fine the SUM borrowed : Mis pened (b) 1200 on (4) none of these A pag anvest some amount under S$} and Cr re eect period at 6% per annum, Bach at fs Tg of Rs. 65,000. at the end of 6 years. Which of the ‘Saal principals less than thar of p © Pepa fy inal principal is equal ro that of p "Sing Py Pi percemage earning is less than that of Q mh By dhonly (b) Ui) only (ad oly (@) (i) and (iii) only 1g veteabore (Le, previous) problem, what is the ratio of p's {gai smount tothat of. ifP and Q invest the same amounts? 00 ea 136 100" er ce | (081° o ter) 190 ,(106\" 10, (106 id) none ts (2) td) cof these Wi. tale Blam has lent some money to Aqju at’6% pia. and the Sejuat BY pa. At the end of the year he has gain the overall beret 7% per anniim. In what ratio has he lent the money ‘wan and Baaju? W29 by de (65:6 {dy 4:3 ‘Tr copound interest om a certain sum for 2 years is Rs. 756 ‘25 (imple meres) Rs, 720.1 she sum avec veh “Atte tis Rs, 900 and the mumber of years is equal 90 pe PT¢8 per annum, find the rate percent rs oh @ 10 00, aot Datta have to etear heir eapective loane OF ite (Ri equal annual instalments of RS: sn f Tye Pe annum of simple iverest while Pe tg 2hM compound interest. Whitt nttmen8 ete wy Rs 5 “bas. (ae tated eae ee, ie interest to Bisbal. the half of he inmerest at which BET pen 50, 51, 54. 55. 4 am Pound imeres forthe #0%6 pa. Whats the principal sean? Te seta 8 te brncpa su (4) $0000 Thea ference berwir Simple and com; th year (a) Tear RS Tan at (2 Lakh, (b) Rs. 290 (2) Bs. 330 for the ne year ana recerved total interest Te ee tia tral sim invested? 7 8) Re 14000 ©) Bs. 24000 a) Re. 38000 he te of ners in banks DN an HBL are the rato +4. IF « person invested some amount in hoth the banks, and received equal amounts from both the banks in wo veat, ‘The ratio of ansbunt vested in DNB and idl respectivelyia {a} 15:1 (has? (©) 718 (a) 108 - 107 ‘The ratio ef Cl for 3 years and S1 for | yeat for a fixed amomat Ea rate of ri is 3.64, What isthe value of 1? (a) 1085 (b) 15% (6) 20% (4) none of these ‘Asum of money becomes 12/5 times oflsel is 32 yeas atr34 cof SL. What is the value afr? (a) 6% 1% © fd a6 The difference between iterest received by A and B is Rs, 28 ‘on Rs. 150th for 3 year. Whats the diference in rate of teres? (a) 1% thy 2.5% te 05% ia) 04% QM. smotrits of each Rs, 43892 is lend t0 ewe persons for aanae 30% St and second @ 30% Cl annually, By how swuch per cent the Cl is greater than the simple sneorest received io tis'3 years duration? @ 2% {by 35% (o) 33.3: (6) one ofthese a, 3500 was lent pardy (48 and partly 6 SL. The total es tvetived afte 3yoars is 498, Whats the amour Sens @ anal fa) Rs. 1300 oy Ra. 1800 200 ta} Rs. 2200 fies particular Inealirys decreases7 tay 125% (by 18% (0) 20% (ay 16.60% 8 Abicycle canbe purchased om cash payee! same bieyele can alo be purchased a ‘Gnitial payment, atthe time of pucchasin fest can be pald i 3 equal installments of Rs faonihs, The rate of SI per anwar charged by 0 9 aay Bem wre 7 © new (a) ndac of these ie down payment soe Rs, 250 and ‘ag for next 3 oe dealer i= 9. Daca Ra Jends oq sum af saoney a the same eat OF loterest to A and #. The rooney lends to A becomes PRI ‘he ciginal amount njust fou years at simple interest. WH Data Ram lends to B for che Grst two years at compoun ‘nterest and for the rest two years at simple interest. Ifthe diference herween the amount af A und B after 4 years is As, 2750, What i the amoune of maney chat Data Ram. lends ‘each one? (a) Rs, 40000 (b) Rs: 6000 4e) Ms 8000 (ay Ms 80000 10, Akram Alt left iv amouat of Rx 340000 ta be divided Herween his twa sors aged 10 years and 12 years such thax both ofthem would get an equal amount when each atain 18 years age. What és the share of elder brother if the whole amount was invested at 10M simple intexest a) 12000 {b) 16000 (©) 160000 (4) 180000 111. Saiyam ook lnan from IDIDI Bank for is 2 years course of MBA at IMD. He took the loan of Rs. 6 lakh such that he Would be charged at 8% per annum at CI during his course sand at 10% Cl afer the completion of course. He fetumed half ofthe amount which he had! the pai on the completion ‘of bis studies aad remaining alter 2 years, What is the total ‘amount seturoed by Satyam ? (a) Rs, 7.73323 Ink (b) Rs. 7.54 lakh (©) Rs. 7.336 lakh (4) none of these 12, ‘Wehod 1000 goat at the beginning of year 2001 Sf fom sich year increases by 10% by giving beng compounded saoally) At the end of each year we dou ‘he no of goats by purchasing the ame no.of goat as there ‘he oo of goats witht at heme: What isthe a, of goats 15. 16. 17. 19. a. ay wm a joint venrure in Which the 5 me ratio 28: 15. A invest heat dB joins in ater 9 monehs ye tt ay ti of thei initial investinene na) iF (by 1a Petting oy 7 (db 15:7 i fe Os role IA mae And #08 j and #8 of the year # wha is the 1 Piven By BS oD 1) 2600 Yea fo) 1350 on f Da be dete ai it and Govind exch invested Rs, 15000 fy Apsitlce of interest but Arvind’ Invenmeny gp | 32 erally wile Covi KOEHN is thugs a 3 ‘Whae amount did Arvind receive more iy.” 9 rn eae (8) Be. 2450 og (¢) data insufficient (@) mone of these jam Lal takes a loan of Rs. 10500 at 10%p.. Sarin which is 10 be repid In two et {pstalments, One at the end of one year and the gg end of the second year. The value of each iasacyes (a) 5987 () 6050 fe) 69528 (4) 5678.5 Hari Lal and Hast Prasad have equal amouny i invested all his amount at 10% compounded smn years and Hari Prasad invested 1/4 at 10% conge.| interest (annually) and rest at r% per ancum x » interest for the same 2 years peried. The amouz: rence bath at the end of 2 year is same. Wat isthe vale 2 fa) 14% (b) 12.5% (e) 10.5% (d) 1% ‘The annual sales of a company in the year 2000 wash ‘and in the year 2005 was Rs. 2490. Find the ‘annual growth rate (CAGR) of silles in the given pera same company: (a) 14.280% 19 15% (a) 20si instalmentsTe means the pelocipal sum i Ra, 1400 sal in = x5al Alternativetys Fu 2{ir+ 4) =112 Amount paid in second year = 110 » 10-51 = P= 1400 1s. A i ‘7. Sl= PP =P (Inverest = Amount — Principal) Py=P rae pa Pama 747 SM of = bSyeans Pxr20 ty P= (interest = Amount - Principal) 2 . (@=aP—y 10. 100 2 ore pe Now, in ist ens, $9 the ime peri wl double the 51 acer properina the tne pet rece interest be same and principal ay welt at tt Fate of ate Bisén2' A x1004 o 10R, = 15P, = a AcPioait s no am a Ate VAP Py 301 20:3 = ie &S Hints & Solutions Ee ve nevond principal 888, 125» 65,1) sherefo i Se se eee x pes ay is wo phone option a ‘*“ 1300 «0.12 + 1200 «9.125 « 305 ‘ cy isthe correct option ea Benet (i otys Solve through alligation terre ne rac of is principal othe ‘ 13:12 ae ed 2500, = - 24 Ot a 5 me 0.24 ba i “ay a 429 15004) Bey obi ie anton sh ix sled by mY, (soomaz. 13004) sncthoa instead of raking comple sian \ a re 14. Asiount te be paid in first year = ‘Amount left as a principal for the second year Shorteut (for $1) Since $1 in second ease igxe100 b March April pci-e + M+ 18 , 1 f =7aidays = E vear 00 «121 at heh eee 1NOx15%2 ns 244 sO 100, 5 a-p(it is) 3 A~ro00{t 2) 100, A= 1000 «¢L.1P A=1331 Gl=A-P = 1331 - 1000-331 2 A=10000 xi-2y° A= 10000 = 2.0736 A= 20736. CleA-P = 4000 «1,953125 - 4000 = 4000 «0.953125 3812.5 = 5000 « (1-3) 5000 = 5000 x 2.8561 ~ $000 = 5000 (1.8561) =9280.5 i ' sataton[ t+ 3) 4 2} yet 2” 100 r=5% ® x SA thee aee(ir te) 100, ® ® 29, {7s veo can be. easly dome: by coniiditig same ‘perpen values = re10% Alternadively: Go through: options 6000 10H g6pg 110%, gg 110%, ‘Hence, assumed option is-correct. ‘Ga through option teaaia12 Leap = 144 1x3) =< 1728 Inq) = 20736 Hence minimum 4 years are required 10 double the sum YG. 1h. By rt Belt ‘A = $000 (1.08) (1.19.12) AW 6652.8 1- 1652.8 = (6652.8 - 5000) : : w-7[1+35) ha os ai) Now, ar -( + a) ory } bo) <= The amaust becomes 16 (= 2) times «Hence (hi) is correct, (2400 016 = 38400) wilt 2a i s0-a{ Ta) + x= Rs. 360 yf sference between Cand Stor years =P (5)Alternatively; Go back in the severe proces. Rs. 40 at 10% iglhes thatthe prncipal fx his Inerest WS Rs. 400. Again bythe same logic Rs, 400 as interest a the principal af Rs. 4000 at 10%. cbained = fe . sven =p(1+ 58) 2 P8000 Alternatively: Best way is 'o go through options. 38. Difference berween Cl and 51 for 2 years walle equ to the snterest on SI for frst yoar. Hence, 6000 «0.07 > 4200.07 = 29.4157.5 and 75004008 = 600 x08 48 21575 and 4000 +0. > 1400«0,1 14001575 and 7000.15 = 1050 0.1S=1575~ 1575 ‘Thus option () is eoereee. r= 10% 47. Atsount co be paid tthe end of 2 year _ 200 #12 108) + 800-= sao Amount lft as principal for the second year = 480 = (880400) CUB My, si psers venan oe pb ats pear 8p. $0.4 = Rs an 1 month = 440 - 200 - 4g = ree after next month « 244 ped at Ri. 240 are T2100 = 20hper annum ‘pmount as principal for frst and at month = 6 300 = Re, 300 interest = 360 - 300~ Rs, 69 Tecefore interest chan ies Bae 100 “12 r= 120% ‘ao, Amoum as « peincipal for 2 month = 2400 — qq At the rate of r% per annum after 2 months, g, amount ro 1400 xr «2 a [Mon Se ‘ ‘Again feat amount forthe 2 instalments tee recon wil be I (800 xt a (eco al & From (i) and (i), we get 1400» “41. Balance price to be paid in instalments = 1980 ‘At the raie of r per annum afver 4 months, fil sovost to (span 1980 +428) ener Taxtoo }~ ‘Now, the toral amount for the: 4 instalments atte ed foonh moh wi be 12100 _ tex 12100, toe 25x =4x+ = a¢2+ * ip lt 2eo 38x a & from) and (iy 3 nas 4 45,a 2 wi a tly i dof @ THO wiRY - eib0% [ss0+- son) _ S803 x=73.058 > gacabments be Rs, het be pa mstalments = 390299 eee of al the Uhree instalments is ae) st be egual to Re. 390200 wit iy ofimerest = 1686 anc + te of loterest = 4% per quarter eel ofall three instalments 3)-)] hl amount paid = Rs. 17576 = 3= 52728 ttirest charged = 52728 ~ 48775 = 9953 S03 44-20 senantyeatiy toe of ier vases 8 + py is (3) a = 4096 f rou) (2-3) r-[ocon «22(14 22» $3) OO) As att SFr, ern peenne sin oF Pe 1111200 is greater year a 7280 =P *20 iy as fo B= 11 = P=s0000 Alternatively: Initially ort ae ae ——___m__yoar_yenr year St 10000 17000 © 19000 = ie000 18000 119000 12000__14400_17280_20736 ‘Cl for 4" year = 20736 ~ 17280 = 3456 ‘SI for 4" year = 2000 Difference between Ci and SI = 1456 far Rs. 10000 So, the difference af Re, 7280 ie far Rs. $0000 St, PuSn9 Puldud ig Too 12 100 x i P= Rs, 4000 Now, 400065 2+ M4 xB = Rs 290 100 52. Let the principal be x, then a ee whe base xe feta 100 st x= 14000 ‘Alternatively: Go through suitable options ‘Choose any middlemost option so that if the chosen. option is pcr it on ca deseren abate oa bore {crease or decrease the value af the choices given. piers = ~ 100 100 Kat = Ao?Peon 4 ir 2p of Bafter 4 years = 25? graeme ee 56 joe ene neon pion P = kooo sane Bi py 1426210 6, L619 105 100 goat eich is tobe rerumned on completion ef studies F = 600000 » (1.08)? 990840 jo ony half of 699840 is returned! which is equal to eed ase which is returned after two year of completion of ln ee reales) ~ e234. fe etree = 249020 + 423403.2= 7733232 = Rs. 7.73323 lakh 2200) 2430] es 10648] h Pi ‘ulimasely 8% interest is charged. et value after 3 years = 125971.2 hy “Site 25 52 30 years wo of end! 15, 16, a7 18, Bis ‘We can find tho poi of bus not investingnt, ‘We dom’ know the sate of inexest ssc 219) Un" a = *= G50 Lethe amount of nesten with neo be Rs 400, then Ha Lal Han Pron (1000371 -tiona.ar + [sm 22) “ rato ‘Best way i 0 go through aptions 1000 « (1.2)? = 2488-32— 2490, Amount eared by HDPC ~ 1609000 snpoeen «983 = 1200000 Amount earned by HUDOD = 1900000 (1.1) = 1331000 Net earning of HUDCO = 1337000 ~ 1200000 131000 lnterest pai by Ram Singh » Rs, 48000 Now go through option 4200 = 190000, [6x4 see) 190 48000 = 48000 Henen proved that option (8) correct. micans Ram Singh availed the discount after 4 years af beanin, Worth of hotel after 9 years =1000000 0.27 = 1728000 Worth of ear after 3 years = 1600000. = Rs. &75,000 ‘So, the difference in their worth (pertaining to hotel and car) is = 1728000 ~ 675000 = 10,53,000 oa