IMPORTANT FORMULAE:

Let rate = R% per annum and Time = T years. Then,

1. present worth (P.W.) = 100 x Amount / 100 + (R x T) = 100 x T.D./R x T

2. True discount (T.D.) = (P.W.) x R x T / 100 = Amount x R x T / 100 + (R x T)

3. Sum = (S.I.) x (T.D.) / (S.I.) - (T.D.)

4. (S.I.) - (T.D.) = S.I. on T.D.

5. Simple interest (S.I.) = principle x R x T / 100

Note that, T.D. = Interest on P.W. and Amount = (P.W.) + (T.D.)

Question 1

The present worth of a bill due 1 1/6 years hence is Rs.2400. What will be the rate percent of the bill
at the end of 5 years if the present worth is Rs.2400 ?

a) 3.5% b) 5% c) 6% d) 7.2%

Answer : b) 5%.

Solution :

We know that, Sum due = P.W. + T.D. = P.W. + S.I. on P.W.

Since, the present worth of the bill due 1 1/6 years is Rs. 2400.
Sum due = (Rs.2400 + S.I. on Rs. 2400 for 1 1/6 years)
= Rs.2400 + S.I. on Rs.(2400 x 7/6) for 1 year...(1)

Also, the present worth of a bill due 5 years is Rs. 2032.
Sum due = (Rs.2032 + S.I. on Rs.2032 for 5 years)
= (Rs.2032 + S.I. on Rs.2032 x 5 for 1 year)....(2)

Equating (1) and (2), we get

Rs.2400 + S.I. on Rs. (2400 x 7/6) for 1 year = Rs. 2032 + S.I. on Rs. 2032 x 5 for 1 year
Rs.(2400-2032) = S.I. on Rs. 2032 x 5 for 1 year - S.I. on Rs. 2400 x 7/6 for 1 year.
Rs.368 = S.I. on Rs. (2032 x 5 - 2400 x 7/6) for 1 year
Rs.368 = S.I. on Rs. (2032 x 5 - 2400 x 7/6) for 1 year
Rs.368 = S.I. on Rs. 7360 for 1 year.
Using the formula number 5, we have,
Rs. 368 = 7360 x R x 1 / 100
R = 368 x 100 / 7360 = 5.
Hence, the required rate is 5%.

Question 2

If Rs.60 is the difference between the simple interest and true discount on a certain sum for 18
months at 16% per annum then what will the sum?

a) Rs.225 b) Rs.242 c) Rs.125 d) Rs.95

Answer : c) Rs.125

Solution :

Let the sum be Rs.100
Time = 18 months = 18/12 years = 3/2 years.
Rate = 16% per annum

Then, S.I. = P x R x T/100 = Rs.100 x 16 x 3 / 2 x 100 = Rs.24

And T.D. = Amount x R x T / 100 + (R x T)
= Rs. 100 x 16 x 3 / 2(100+(16 x 3/2))
= Rs. 100 x 8 x 3/124
= Rs. 600/31

The difference between S.I. and T.D. for Rs.100 = Rs.(24 - 600/31) = Rs.(144/31)

Difference Sum
144/31 100
60 ?
Therefore, the sum = 100 x 3 x 60 / 144 = 125.
Hence the answer is Rs.125.

Question 3

If the true discount on Rs.5000 at 10% per annum and simple interest on Rs.4000 at the same rate
are equal for same time period. Find the time period.

a) 3 1/4 years b) 2 1/2 years c) 1 3/4 years d) 2 years

Answer : b) 2 1/2 years.

Solution :

Given that, R = 10%, amount = Rs.5000 for T.D. and Rs.4000 for S.I.
Let T be the time to find.

True discount on Rs.5000 at 10% = Amount x R x T / 100 + (R x T) = 5000 x 10 x T / 100 + (10T) .....(1)
Simple interest on Rs.4000 at 10% = P x R x T / 100 = 4000 x 10 x T / 100 .....(2)

Given that, (1) and (2) are equal, we have
5000 x 10 x T / 100 + (10T) = 4000 x 10 x T / 100
5 /(100 + 10T) = 4 / 100
125 = 100+10T
10T = 25
T = 25/10 = 5/2 = 2 1/2
Hence, the required answer is 2 1/2 years.