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The rate of increase of the price of sugar is observed to be two percent more than the inflation rate expressed in percentage. The price of sugar, on January 1, 1994 is Rs. 20 per kg. The inflation rates of the years 1994 and 1995 are expected to be 8% each. The expected price of sugar on January 1, 1996 would be
Answer & Solution
Correct Answer:
Option
C
Increase in the price of sugar = (8 + 2) = 10%
Hence, price of sugar on, Jan. 1, 1996
$$\eqalign{
& = \frac{{20 \times 110 \times 110}}{{100 \times 100}} \cr
& = {\text{Rs}}{\text{.}}\,24.20 \cr} $$
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