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CAT 1997 — DILR Question 40

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Passage / Data

Additional direction: If the consumer price index for 1970 is to be taken as 105 and the indices for the subsequent years are to be corrected accordingly, then answer 184 and 185.

What is the value of the loans in 1980 at 1983 prices?

Answer & solution

  • A

    Rs.570 million

  • Rs.680 million

  • C

    Rs.525 million

  • D

    Rs.440 million

Solution

Total value of loans = Rural bank loans + Agricultural loans.
Rural bank loan in 1980 = (605 × 288 × 567) = Rs. 98.79 million.
Total value of agricultural loan in 1980 = Rs.498.4 million.
Hence, total loans in 1980 = (98.79 + 498.4) = 597.19.
But this is at a CPI = 131
If it is to be calculated at 1983 CPI, viz. 149, then its value will be 597.19 × (149131) = Rs. 679.24 million = Rs. 680 million (Approximately).

CAT 1997 DILR Q40: What is the value of the loans in 1980 at 1983 prices? — Solution | TheCATExam