Question

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

• A. Ram paid Rs. 275 to Prem
• B. Ram paid Rs. 475 to Prem
• C. Ram paid Rs. 375 to Prem
• D. Prem paid Rs. 475 to Ram

Hint:

Always compare appreciated values after the same time period before deciding payment direction in exchange problems.

Answer 1

The Correct Option is B

Step 1: Price of flat after 2 years Initial price = Rs. $1,00,000$ Increase rate = $10%$ annually Price after 2 years $= 1,00,000 \times (1.1)^2 = 1,00,000 \times 1.21 = Rs. 1,21,000$. Step 2: Price of plot after 2 years Initial price = Rs. $1,10,000$ Increase rate = $5%$ annually Price after 2 years $= 1,10,000 \times (1.05)^2 = 1,10,000 \times 1.1025 = Rs. 1,21,275$. Step 3: Difference in values Difference = Rs. $1,21,275 - 1,21,000 = Rs. 275$. Wait—this shows Rs. 275, but let's carefully read: they exchanged belongings, so the one receiving the more valuable property must pay the other the difference. Here Prem's land is worth Rs. 275 more than Ram's flat, so Ram must pay Rs. 275 to Prem. So the correct answer should be (a) Rs. 275 to Prem—confirm with statement.