Question

A owes B Rs.456.75 payable 4
months hence and B owes A Rs.455.51 payable 3 months
hence. If they agree to settle their account by a ready money payment, what sum should be
paid over and to whom, reckoning the rate of true discount at 4 percent per annum?​

Answer 1

Answer:

Time = 41/2 months = 3/8 year,

Rate = 4 percent

∴ Amount of Rs. 100 = 203/2

∴ P.W. = Rs. 456.75 / (203/2) x 100 = Rs. 450

Again, time = 3 months = 1/4 year, rate = 4 percent

P.W. = Rs. 455.51 x 100 x 101 = Rs. 451

Hence the required sum to be paid to A = Rs. 451 - Rs. 450 = Re. 1

Answer 2

Step-by-step explanation:

Time = 41/2 months = 3/8 year,

Rate = 4 percent

∴ Amount of Rs. 100 = 203/2

∴ P.W. = Rs. 456.75 / (203/2) x 100 = Rs. 450

Again, time = 3 months = 1/4 year, rate = 4 percent

P.W. = Rs. 455.51 x 100 x 101 = Rs. 451

Hence the required sum to be paid to A = Rs. 451 - Rs. 450 = Re. 1

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