1.  A has to pay Rs.220 to B after 1 year.B asks A to pay Rs.110 in cash and defer the payment of Rs.110 for 2 years.A agrees to it.If the rate of interest be 10% per annum in this mode of payment?

There is no gain or loss to anyone
A gains Rs.7.34
A losses Rs.7.34
A gains Rs.11

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Answer: Option  B Explanation:A has to pay = P.W. of rs.220 due 1 year hence = Rs.[220*100/100+(10*1)] = Rs. 200
A actually pays =Rs.110+P.W of Rs. 110 due 2 years hence,
=[110+110*100/100+(10*2)] = Rs.192.66
A gains = Rs.(200-192.66) = Rs.7.34 ```

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2.  A trader owes a merchant Rs.10,028 due 1 year hence. The trader wants to settle the account after 3 months. If the rate of interest is 12% per annum, how much cash should he pay?

Rs.9025.20
Rs.9200
Rs.9600
Rs.9560

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Answer: Option  B Explanation:Required money =P.W. of Rs. 10028 due 9 months hence
=Rs.{10028*100/100+(12*9/12) = Rs.9200. ```

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3.  If the true discount on a sum due 2 years hence at 14% per annum be Rs.168,the sum due is?

Rs.768
Rs.968
Rs.1960
Rs.2400

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Answer: Option  A Explanation:P.W. = 100*T.D./R*T = 100*168/14*2 = 600
Therefore Sum =(P.W. + T.D) = Rs. (600 + 168) = Rs.768 ```

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4.  What is the true discount on a bill of Rs.2916 due in 3 years hence at 8% C.I.?

rs.600
rs.601
rs.602
rs.603

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Answer: Option  C Explanation:P.W. = Amount/(1+R/100)^T
The answer is = Rs.602 ```

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5.  A bill falls due in 1 year.The creditor agrees to accept immediate payment of the half and to defer the payment of the other half for 2 years.By this arrangement he gains Rs.40.What is the amount of the bill if the money be worth 12 1/2%?

Rs.3600
Rs.4200
Rs.5600
Rs.7000

```Answer

Answer: Option  A Explanation:Let the sum be rs.X then,
[x/2+x/2*100/100+(25/2*2)] - x*100/100+(25/2*1) = 40 => x/2+2x/5-8x/9 = 40 => x = 3600
Amount of the bill = Rs.3600 ```

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