The price of an article increases by 5% every year. If the difference between its price at the end of the second and the third year is ₹52.50, then what will be its price at the end of the first year?
Answer & explanation
Correct answer: option 1
Let the initial price be 10000m
Increase = 5% = \(\frac{105}{100}\)
Price at the end of the first year = (10000m × \(\frac{105}{100}\) ) = 10500m
Price at the end of the second year = (10500m × \(\frac{105}{100}\)) = 11025m
Price at the end of the third year = (11025m × \(\frac{105}{100}\)) = 11576.25m
According to the question
11576.25m – 11025m = 52.50m
551.25m = 52.50
m = \(\frac{52.50}{551.25}\)
m = 0.0952
Price at the end of the first year = 10500m = (10500 × 0.0952) = 1000 Approx.