A trader owes a merchant Rs. 10,028 due 1 year hence. The trader wants to settle the account after 3 months. If the rate of interest 12% per annum, how much cash should he pay?

Solution (By Examveda Team)

$$\eqalign{ & {\text{Required}}\,{\text{Money}} \cr & {\text{ = }}\,{\text{P}}{\text{.W}}{\text{.}}\,{\text{of}}\,{\text{Rs}}{\text{.}}\,{\text{10028}}\,{\text{due}}\,{\text{9}}\,{\text{months}}\,{\text{hence}} \cr & = Rs.\,\left[ {\frac{{10028 \times 100}}{{100 + \left( {12 \times \frac{9}{{12}}} \right)}}} \right] \cr & = Rs.\,9200 \cr} $$