### CAT 1997 Question 4

Instructions

The following table gives the number of rooms in different hotels in Mumbai and the cost of building each one of them. Note that all the projects started in 1997

Note: All projects start in 1997.

Question 4

# Assume that the cost of the project is incurred in the year of completion; interest is charged at the rate of 10% per annum. What is the cost incurred for projects completed in 1999?

Solution

Total cost of projects that were completed in 1999 is 275 + 235 + 250 + 300 = Rs 1060 Crores.

Interest for 2 years must also be added to this cost => $$1060(1+(0.1))^2$$ = 1060 * 1.21 = Rs 1282.6 Crores