Question 53

The present worth of a bill due 7 months hence is 1200. If the bill were due at the end of 2 $$\frac{1}{2}$$yr, Its present worth would be Z 1016. What is the rate per cent of the bill?

Solution

Since, 

S.I. = PrincipalRateTime/100

Therefore, 1200 + 12007r/12100 = Amount (A) 

1200 + 7r = A .........(i)

and 1016 + 10165r/2100 = A

Therefore, 1016 + 25.4r = A ...(ii)

1016 + 25.4r = 1200 + 7r

So,

25.4r - 7r = 1200 - 1016

18.4r = 184 

r = 184/18.4 

= 10% per annum


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