# Quantitative Aptitude :: True Discount - Discussion

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## A has to pay Rs. 220 to B after 1 year. B asks A to pay Rs. 110 in cash and defer the payment of Rs. 110 for 2 years. A agrees to it. If the rate of interest be 10% per annum, in this mode of payment :

AThere is no gain or loss to any one

BA gains Rs. 7.34

CA loses Rs. 7.34

DA gains Rs. 11

**Answer:**

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Amount of money that A has to pay = P.W of Rs. 220 due 1 year hence

= Rs. { ( 220 x 100 ) / [ 100 + ( 10 x 1 ) ] }

= Rs. 200

Amount of money A actually pays = Rs. 110 + P.W of Rs. 110 due 2 years hence

= {110 + ( 110 x 100 ) / [ 100 + (10 x 2 ) ] }

= Rs. 192.66

Therefore, A gains = Rs. ( 200 - 192.66 )

= Rs. 7.34

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