The price of a precious diamond increases by 10% every year. Sasha bought this diamond and sold it to Harry after 2 years at Rs. 500 more than the market price. At what price did Sasha buy the diamond (in Rs.)?
Solution
Correct Answer: Option E
Let Sasha bought diamond at a price of Rs. T.
The price of diamond increases by 10% every year.
After two years, market price of diamond = Rs. T × (1 + 10/100) × (1 + 10/100) = Rs. 1.21T
Cost price for Harry = Selling price for Sasha = Rs. 1.21T + Rs. 500 = Rs. (1.21T + 500)
We observe that with information, the value of T cannot be found.
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