Difficulty: Medium
Correct Answer: Rs. 100
Explanation:
Introduction / Context:
For a future sum S due after a time t at rate r, the true discount (TD) relates to simple interest (SI) through standard formulas. A useful identity is S = (SI * TD) / (SI − TD) when both SI and TD refer to the same future sum S, same rate, and same time.
Given Data / Assumptions:
Concept / Approach:
Using the known relationship S = (SI * TD) / (SI − TD), substitute SI = 25 and TD = 20 to compute S directly without solving for r or t explicitly.
Step-by-Step Solution:
Verification / Alternative check:
From TD = S * r * t / (1 + r * t) and SI = S * r * t, the above identity is derived by algebraic elimination of r * t, ensuring consistency.
Why Other Options Are Wrong:
Rs. 250, Rs. 200, and Rs. 500 correspond to misapplications of the formula; Rs. 400 is also inconsistent.
Common Pitfalls:
Using SI − TD or SI + TD as the sum, or confusing present worth with the face value.
Final Answer:
Rs. 100
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