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CAT 1995 Slot 1 · QA · Medium · Percentages

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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%10\% and 5%5\%. After two years they exchanged their belongings and one paid the other the difference. Then:

  1. A.

    Ram paid Rs. 275 to Prem

  2. B.

    Ram paid Rs. 475 to Prem

  3. C.

    Ram paid Rs. 375 to Prem

  4. D.

    Prem paid Rs. 475 to Ram

Answer

A

Explanation

Price of Ram's flat after 2 years =1,00,000×(1.10)2=Rs. 1,21,000= 1,00,000 \times (1.10)^2 = \text{Rs. } 1,21,000. Price of Prem's land after 2 years =1,10,000×(1.05)2=1,10,000×1.1025=Rs. 1,21,275= 1,10,000 \times (1.05)^2 = 1,10,000 \times 1.1025 = \text{Rs. } 1,21,275. Difference =1,21,275−1,21,000=Rs. 275= 1,21,275 - 1,21,000 = \text{Rs. } 275. Since Prem's property is worth Rs. 275 more, Ram paid Rs. 275 to Prem.

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