"Act well your part; there all honor lies."
- Alexander Pope
A man purchased a cow for Rs. 3000 and sold it the same day for Rs. 3600, allowing the buyer a credit of 2 years. If the rate of interest be 10% per annum, then the man has a gain of:
C.P. = Rs. 3000.
S.P. = Rs.
3600 x 100
= Rs. 3000.
100 + (10 x 2)
Gain = 0%.
(Wed, Jul 7, 2010 08:47:34 AM)
Did not get why SP is calculatd by the given formula. Please elaborate.
(Wed, Aug 11, 2010 02:08:10 PM)
What is the formula?
(Tue, Nov 16, 2010 12:29:10 AM)
Buyer purchase for Rs.3000 on credit basis so he is liable to pay Rs.600 as interest for 2 years. i.e. 3000*2*10/100=600. On the other hand, he sold on that day for Rs. 3600 which bouht for Rs.3000 so he got Rs.600 as profit.
Now, see he got Rs. 600 as profit on the purchasing day but he pays Rs.600 as interest after 2 years. so, no profit for him.
Urvi Chheda said:
(Sat, Nov 20, 2010 04:07:52 AM)
wht is the formula? & how it is calculated.
(Sat, Dec 4, 2010 11:27:31 AM)
What is cp & sp?
(Sun, Jan 30, 2011 11:39:55 AM)
elaborate the sp formula
(Tue, Feb 8, 2011 12:14:53 AM)
(Sat, Feb 19, 2011 10:04:56 AM)
How did you calculated the selling price?
(Fri, Mar 25, 2011 08:15:29 AM)
What is the formula ?
(Wed, Mar 30, 2011 07:45:57 AM)
Cost Price (C.P) = 3000
Sellin Price (S.P) = 3600 receivable in 2yrs
Now, to calculate the present value (P.V) of 3600, we use the following formula:
P.V = F.V/(1+i) where F.V is future value (3600)
therefore, P.V. = 3600/(1+20%)
20% because we are talking of 2yrs
P.V. = 3000 approximately
Now Gain = Present value of selling price - cost price
= 3000 - 3000
(Thu, Jun 30, 2011 08:56:43 AM)
Bessie, thanx for explaining,
(Mon, Aug 22, 2011 09:09:46 PM)
What do you mean by a credit of 2 years?
(Thu, Sep 8, 2011 11:34:07 AM)
There are two buyers. In question its not mentioned that which buyer brought it for credit whether the buyer who brought for 3000 or 3600?
(Fri, Sep 16, 2011 05:47:46 PM)
Credit terms for first purchaser have not mentioned.
(Sun, Sep 18, 2011 10:28:24 AM)
Here it's not specified that the first man bought it for credit.
(Fri, Sep 30, 2011 09:09:01 PM)
Why don't we think that the second man bought it for credit ?
(Sun, Oct 16, 2011 12:01:53 PM)
The seller made a profit of Rs.600 on the selling day, but he did that on credit of 2 years with an interest rate of 10%.
i.e 3000*10/100=300 for 1 year
for 2 years it will be 300*2=600
So, in gross he got nothing as interest as it was its future amount = 3600 after 2 years.
Arun Edathara said:
(Thu, Nov 3, 2011 06:10:53 PM)
There is Easy way to understand that is 3000*10/100*2=600.
So there is no profit.
(Sun, Nov 13, 2011 05:42:22 PM)
As you buy anything (cow in above quest.) today you used the from not kept as it is thats why 600 may be considered as profit is it or not?
(Fri, Dec 16, 2011 01:59:03 AM)
Thanks a lot, your explanation helped me alot :-)
Simranjeet Singh said:
(Wed, Feb 22, 2012 07:26:48 PM)
Its the correct Exlanation
(Fri, May 11, 2012 11:24:40 AM)
Present value=future value/ (1+r/100) ^n.
With this it is coming 2974 for present value of 3600?
(Mon, Jul 30, 2012 12:11:35 AM)
Thanks for help
Vignesh Jagan said:
(Mon, Aug 5, 2013 09:09:25 AM)
100 x Amount/100 + (R x T).
Dhruv Mahajan said:
(Fri, Oct 4, 2013 10:29:25 PM)
On what basis did we decide that we need to calculate Simple Interest and not Compound Interest?
(Fri, Dec 6, 2013 12:15:26 AM)
Am lost help me out. How do you come up with 0%. Use a simple elaboration please.
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