Question

Due to a complete drop in demand the price of the petrol (per litre) was decreasing at a rate of 5% per annum for two years. Later due to a sudden increase in demand the price of the petrol (per litre) increased at 5% per annum for two years and reached a price of Rs. x . If the initial cost of petrol (per litre) was Rs. y, then

• A. x> y
• B. x< y
• C. x = y
• D. can’t say
• E. x ≥ y (Depends on x)

Answer 1

The correct option is A

x> y

Let the initial price of petrol (per litre) be Rs.x

Cost after two years = ${\left(\frac{95}{100}\right)}^{2}x$

Cost after another two years = ${\left(\frac{95}{100}\right)}^2{\left(\frac{105}{100}\right)}^{2}x$

= $0.99500x$

$x>y$