Find the true discount on Rs. 39.69 due in 2 years reckoning compound interest at 5%?

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Accepted Answer

∵ P.W. = 39.69 / (1 + 5 / 100)2 = (3969 x 100 x 100) / (100 x 105 x 105) = Rs. 36 ∴ True discount = Rs. 39.69 - 36 = Rs. 3.69

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