A has to pay Rs.220 to B after 1yr. B asks A to pay Rs.110 in cash and defer the payment of Rs.110 for 2 yrs. A agrees to it. If the rate of interest be 10% per annum in this mode of payment:
Correct Answer: A gains Rs. 7.34
Explanation:
A has to pay = Present worth of Rs220 due 1yr hence
= Rs.[(220 x 100)/100+(10 x 1)] = Rs.200
A actually pays = Rs.110+PW of Rs.110 due 2 yrs hence
