In 1978, a kg of paper was sold at Rs25/-. I f the paper rate increases at 1.5% more than inflation rate
which is of 6.5% a year, then what wil be the cost of a kg of paper after 2 years?

• If the paper rate increases at 1.5% more than the inflation rate which is 6.5%
  This means paper rate increase is 1.5+6.5 = 8% per year
  For the first year the increase is 8 % or (8/100)x25 = 2
  So the new cost is 25+2 = 27
  For the second year the increase is the same = (8/100)x27 = 2.16
  So the cost = 27+2.16 = 29.16
• 11 years agoHelpfull: Yes(23) No(0)
• Ans. 29.16
  
  Total inflation = 6.5+1.5 for 1 year.
  
  25 ( 1 + 8/100)^2 = 29.16
• 12 years agoHelpfull: Yes(7) No(1)
• paper rate increase per year = 7.5%
  
  rate after 2 yrs = 25*(1+7.5/100)^2= 25* 1.075^2 = 28.90 Rs
• 12 years agoHelpfull: Yes(1) No(6)