Difficulty: Easy
Correct Answer: Rs. 18.33
Explanation:
Introduction / Context:
We reuse the true discount formula to find TD at double the time given TD at the initial time.
Given Data / Assumptions:
Concept / Approach:
If TD = F * x/(1 + x) at time t, where x = r*t, then at 2t the parameter is 2x and TD(2t) = F * 2x/(1 + 2x).
Step-by-Step Solution:
x = 10/(110 − 10) = 0.1. TD(2t) = 110 * 0.2/1.2 = 110/6 = 18.333... → Rs. 18.33.
Verification / Alternative check:
Present worths: P(t) = 110/1.1 = 100; P(2t) = 110/1.2 ≈ 91.666...; TD(2t) ≈ 18.333....
Why Other Options Are Wrong:
20 and 22 assume linearity; 21.81 and 19.00 are not consistent with the precise ratio.
Common Pitfalls:
Assuming TD doubles with time; forgetting to recompute using 2x.
Final Answer:
Rs. 18.33
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