# Anupam owes Madhav Rs. 1208.40 payable 2 year hence, Madhav owes Anupa

| Anupam owes Madhav Rs. 1208.40 payable 2 year hence, Madhav owes Anupam Rs. 1112.40 payable 6 months hence. If they decide to settle their accounts now by payment of ready money and the rate of interest be 6% per annum, then who should pay and how much?

A. Anupam, Rs. 2

B. Madhav, Rs. 1

C. Anupam, Rs. 3

D. Madhav, Rs. 3

### Right Answer is: B

#### SOLUTION

Present value of loan taken by Anupam = = Rs. 1079

Present value of loan taken by Madhav = = Rs. 1080

Hence, Madhav will pay Rs. 1 to Anupam.

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Anupam owes Madhav Rs. 1208.40 payable 2 year hence, Madhav owes Anupa