Aptitude - True Discount - Discussion

He paid 1950 ...which will turn out to be 1950+195 =2145 after 1 year....

Now according to the question he gets 2200 after 1 year so the present value stands out to be 2000....

Therefore the answer has to be 55 (2200-2145) as this will be the final result of the deal....

The que actually is that the man buy the watch in Rs 1950 and sells it in 2200 in one yr.

But actually the rate of interest applies that time is 10%p.a. So if calculate the interest gain by guy due to dis rate, it will come out to be

c.p*r*t/100 =1950*10*1/100=195rs.

So actually the value of watch will be 1950+195=2095rs after one yr and the man sells it in rs.2200 .so clearly he gains a profit of RS 55 in 1 year.

I think this is correct according to the concept of the prob. without any formula.

Please explain this clearly.

Okay let me try.

We know man buy watch for rs 1950/-
and he sell it 2200 for a credit of 1 year.

Let us assume the current price of watch is X.
So X + (X*10*1)/100 = 2200 (after one year with interest)
X= 2000rs(after calculation)

So man see watch at Rs 2000/- so he gains 2000-1950 = Rs.50 .

Should we calcuate the value of 1950 at 10% per annum?

Kindly clear my doubt.

I agree with anurag singh.

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)

Thanks sachin...

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.

Thanks ramesh.