CAT 1995 — QA Question 3
Successive Percentage ChangeEasy
Ram purchased a flat at Rs.1 lakh and Prem purchased a plot of land worth Rs.1.1 lakh. The respective annual rates at which the prices of the flat and the plot increased were 10% and 5%. After two years they exchanged their belongings and one paid the other the difference. Then
Answer & solution
Ram paid Rs.275 to Prem
- B
Ram paid Rs.475 to Prem
- C
Ram paid Rs.375 to Prem
- D
Prem paid Rs.475 to Ram
Solution
After 2 years, the price of the flat will be (1)(1.10)2 = Rs.1.21 lakh.
Correspondingly the price of the land will be (1.1)(1.05)2 = Rs.1.21275 lakh.
Hence, the price of the plot = Rs.(1.21275 – 1.21) lakh = Rs.275 more than that of the flat.
Hence, if they exchange, Ram will have to pay this amount to Prem .