Question

The present worth of ₹ 11,660 due 9 months hence is ₹ 11,000. Find the rate of interest.

Answer 1

Sum due = ₹ 11,660, Present worth = ₹ 11,000.

n = `9/12` years

True discount = Sum due – Present worth

= 11,660 - 11,000

= 660

True discount = `("P.W." xx "n" xx "r")/100`

`660 = (11,000 xx 9/12 xx "r")/100`

`660 xx 100 = 11,000 xx 9/12 xx "r"`

∴ r = `(660 xx 100 xx 12)/(11,000 xx 9)`

∴ r = 8%

∴ The rate of interest is 8% p.a.