A man buys a watch for Rs. 1950 in cash and sells it for Rs. 2200 at a credit of 1 year. If the rate of interest is 10% per annum, the man:
Q1. A man buys a watch for Rs. 1950 in cash and sells it for Rs. 2200 at a credit of 1 year. If the rate of interest is 10% per annum, the man:
Answer: Gains Rs. 50
Explanation: Present value of Rs. 2200 received after 1 year at 10% = 2200/1.10 = Rs. 2000; gain = 2000−1950 = Rs. 50.