A owes B, ₹ 1573 payable $1 \frac{1}{2}$ years hence. Also B owes A, ₹ 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)A, ₹ 28.50
(b)B, ₹ 37.50
(c)A, ₹ 50
(d)B, ₹ 50
Answer
Answer (as printed): D
Explanation
A owes = P.W. of ₹ 1573 due $\frac{3}{2}$ years hence $$=₹\left[\frac{1573 \times 100}{100+\left(14 \times \frac{3}{2}\right)}\right]=₹\left(\frac{1573 \times 100}{121}\right)=₹ 1300 .$$ B owes = P.W. of ₹ 1444.50 due 6 months hence $$=₹\left[\frac{1444.50 \times 100}{100+\left(14 \times \frac{1}{2}\right)}\right]=₹\left(\frac{1444.50 \times 100}{107}\right)=₹ 1350 .$$ ∴ B must pay ₹ 50 to A.
Explanation as extracted from the printed page; notation may be imperfect.