Aptitude - True Discount - Discussion
Discussion Forum : True Discount - General Questions (Q.No. 8)
8.
A man buys a watch for Rs. 1950 in cash and sells it for Rs. 2200 at a credit of 1 year. If the rate of interest is 10% per annum, the man:
Answer: Option
Explanation:
| S.P. | = P.W. of Rs. 2200 due 1 year hence | |||||
|
||||||
| = Rs. 2000. |
Gain = Rs. (2000 - 1950) = Rs. 50.
Discussion:
87 comments Page 5 of 9.
Jatin said:
9 years ago
Guys we'll se present value of 2200.
Present value of 2200 = 2200 ÷ 1.1 = 2000,
(Let us assume present value of 2200 be x.
So x+10%of x = 2200,
1.1x = 2200,
X=2000.
Profit = 2000 - 1950 = 50.
Present value of 2200 = 2200 ÷ 1.1 = 2000,
(Let us assume present value of 2200 be x.
So x+10%of x = 2200,
1.1x = 2200,
X=2000.
Profit = 2000 - 1950 = 50.
Shubham Singh said:
9 years ago
If P = 100 on 10% rate of interest he have to pay I = 110.
So, 100 -> 110.
x -> 2200.
By Solving x = 2000.
So, profit is 2000 - 1950 = 50.
So, 100 -> 110.
x -> 2200.
By Solving x = 2000.
So, profit is 2000 - 1950 = 50.
Akshay thakur said:
7 years ago
I also agree @Ankit.
Dan Tran said:
3 months ago
Guys, this is just the matter of point of time.
Simply:.
Income = 2200 - 1950 = 250.
Interest to pay = 1950 * 10% = 195.
Net profit = 250 - 195 = 55 (I believe this is the correct one in common sense).
However, in financial term, if we consider the net profit at t = 0 (at year 0, exactly when the man took the credit) instead of t = 1 (when the man sells the watch), we need to discount the net profit by 10% (which is a discount rate for the loss of money value in general) and we have: 55/ (1 + 10%) = 50.
Simply:.
Income = 2200 - 1950 = 250.
Interest to pay = 1950 * 10% = 195.
Net profit = 250 - 195 = 55 (I believe this is the correct one in common sense).
However, in financial term, if we consider the net profit at t = 0 (at year 0, exactly when the man took the credit) instead of t = 1 (when the man sells the watch), we need to discount the net profit by 10% (which is a discount rate for the loss of money value in general) and we have: 55/ (1 + 10%) = 50.
Abhishek said:
1 decade ago
Thanks Sachin....
Sharad goyal said:
1 decade ago
I agree with anurag singh.
Faraz said:
1 decade ago
Present value= (future value x 100) which is divide by 1 + interest rate (10)
but here you change formula
future value x 100 divided by 100 + (interest rate x 1)
but here you change formula
future value x 100 divided by 100 + (interest rate x 1)
Sairam said:
1 decade ago
Thanks sachin...
Anurag singh said:
1 decade ago
CP=1950. sp(after 1 yr )=2200.
Let present sp=p.
then use
SP(after 1 yr )=p+(p*r*t/100)
=> 2200=p+(p*10*1/100)
=> p=2000.
We are dealing with present values
present cp=1950
present sp=2000
=> Gain=2000-1950=50.
Let present sp=p.
then use
SP(after 1 yr )=p+(p*r*t/100)
=> 2200=p+(p*10*1/100)
=> p=2000.
We are dealing with present values
present cp=1950
present sp=2000
=> Gain=2000-1950=50.
Mahesh said:
1 decade ago
Thanks ramesh.
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