M owes N ₹ 3146 payable 11/2 yr hence. Also, N owes

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M owes N ₹ 3146 payable 1¹/₂ yr hence. Also, N owes M, ₹ 2889 payable 6 months hence. If they want to settle the account forthwith, keeping 14% the rate of interest, who should pay and how much ?

1. N should pay ₹ 100
2. N should pay ₹ 50
3. M should pay ₹ 100
4. M should pay ₹ 50
5. None of the above

Correct Option: A

N owes PW of ₹ 3146 due 3/2 yr hence
i.e. {3146 x 100} / {100 + (14 x 3/2)} = (3146 x 100) / (100 + 21)
= 314600 / 121
= ₹ 2600

N owes PW of ₹ 2889 due 6 months hence
i.e. {2889 x 100}/{100 + (14 x 1/2)} = (2889 x 100)/(100 + 7)
= (2889 x 100)/107 = ₹ 2700
∴ N must pay ₹ (2700 - 2600) i.e. ₹ 100 to M.