The true discount on Rs. 2562 due 4 months hence is Rs. 122. The rate percent is:_________?
Correct answer: C. 15%
- A. 12%
- B. 13%
- C. 15%
- D. 14%
Explanation
The present value is Rs. 2562 - Rs. 122 = Rs. 2440, so the interest ratio for 4 months is Rs. 122/Rs. 2440 = 0.05. Since 4 months is 1/3 year, the annual rate is 0.05 x 3 = 0.15 = 15%. The likely trap is 12%, obtained by comparing the discount with the bill amount instead of the present value.
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Profit and loss compare the cost price and selling price of an item, using profit or loss percentages based on the cost price unless stated otherwise. Questions include marked price, discount, successive discounts, commission, and finding an unknown price, with care needed to distinguish discount from loss.
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