Indian Institute of Foreign Trade 2009 Solved Paper

Question : 102 of 122

Marks: +1, -0

Because of economic slowdown, a multinational company curtailed some of the allowances of its employees. Rashid, the marketing manager of the company whose monthly salary has been reduced to Rs.42000 is unable to cut down his expenditure. He finds that there is a deficit of Rs.2000 between his earnings and expenses in the first month. This deficit, because of inflationary pressure, will keep on increasing by Rs.500 every month. Rashid has a saving of Rs.60000 which will be used to fill this deficit. After his savings get exhausted, Rashid would start borrowing from his friends. How soon will he start borrowing?

10th month
11th month
12th month
13th month

Validate

Solution:

first month he will have deficiency of 2000, second month he will have deficiency of 2500, Third month he will have deficiency of 3000, and so on
He won't borrow until all of his savings (60000) gets exhausted i.e. until 60000 - (2000 + 2500 + 3000 + ........ up tonth month ) becomes negative
i.e

60000 < n/2×(4000+(n-1)500)

i.e

1200 < n×(35+5n)

i.e

240 < n×(7+n)

This condition first becomes true for n=13 therefore Rashid will have to borrow from 13th month
Therefor the answer is option 'D'

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