Question: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 :
A There is no gain or loss to any one
B A gains Rs.7.34
C A loses Rs.7.34
D A gainsRs.11
+ ExplanationA has to pay =p.w.ofRs.220 due 1 year hence
=Rs.[220×100100+(10×1)]
Rs.200.
A actually pays
=Rs.110 + p.w. of Rs.110 due 2 years hence
=[110+110×100100+(10×2)]
=Rs.192.66.
:. A gains =Rs.(200-192.66)
=Rs.7.34.