1. A has to pay Rs.220 to B after 1 year.B asks A to pay Rs.110 in cash and defer the payment of Rs.110 for 2 years.A agrees to it.If the rate of interest be 10% per annum in this mode of payment?

A. There is no gain or loss to anyone B. A gains Rs.7.34 C. A losses Rs.7.34 D. A gains Rs.11

Answer Answer: Option B Explanation: A has to pay = P.W. of rs.220 due 1 year hence = Rs.[220*100/100+(10*1)] = Rs. 200
A actually pays =Rs.110+P.W of Rs. 110 due 2 years hence,
=[110+110*100/100+(10*2)] = Rs.192.66
A gains = Rs.(200-192.66) = Rs.7.34

2. A owes B, Rs.1573 payable 1 1/2 years hence.Also B owes A, Rs.1444.50 payable 6 months hence.If they want to settle the account forthwith keeping 14% as the rate of interest then who should pay and how much?

A. Rs.28.50 B. Rs.37.50 C. Rs.50 D. Rs.50

Answer Answer: Option C Answer: Option D Explanation: A owes = P.W of rs.1573 due 3/2 years hence
=Rs.[1573*100/100+(14*3/2)] = Rs.(1573*100/121) =Rs.1300
B owes = P.W of Rs.1444.50 due 6 months hence
=Rs.[1444.50*100/100+(14*1/2) = Rs.(1444.50*100/107) = Rs.1350
B must pay Rs.50 to A

3. The difference between the simple interest and the true discount on a certain sum for 6 months at 4% is Rs. 15. Find the sum?

A. Rs. 38350 B. Rs. 38250 C. Rs. 28250 D. Rs. 32850

Answer Answer: Option B Explanation: ∵ 15 = [A x (4 x 1/2)2] / [100(100 + 4 x 1/2)]
⇒ 15 = (A x 4) / (100 x 102)
⇒ A = 15 x 25 x 102
∴ A = Rs. 38, 250.