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Quantitative Reasoning – Exchange Rate – Solve it mentally!

2014_QNR 9. When Udar purchased an item online from australia for AUD 350.00 ,the exchange rate was 1000 INR for 17.50 AUD .Udar’s bank charged him 1.5% for the transaction. The total cost for the item was
(1)23,000 INR
(2)30,000 INR
(3)20,015 INR
(4)20,525 INR

Ans: The question can be solved without using pen and paper; first step is to understand the exchange rate. The below diagram can used to calculate mentally in this case:

2014_QNR 9_1

 

We know that, 17.5 AUD = 1000 INR; cost of the item is 350 AUD. We need to ask this question “How can I reach 350 from 17.50?” or “What must be multiplied with 17.5 to get 350?”. This is easy as 17.5 has some relation with 350; students should target to solve questions taking the “merit” of numbers involved. Let the multiplying factor be ‘M’ as shown above.

Next diagram shows how to do the calculation mentally in steps:

2014_QNR 9_2

As can be seen above, multiplication Factor= M= 20. Now, we have reached 20,000 INR and next we need to calculate the interest on this amount that the bank charges. Since, we are calculating mentally we can draw two more figures:

2014_QNR 9_3

 

[1.5% is a relative picture: On 100 INR, the interest chareged is 1.5 INR or On 200 INR, the interest chareged is 3 INR and likewise.]

The second diagram targets to reach 20,000 (the price of item) from 100 using multiplication factor ‘N’. Here we go-

2014_QNR 9_4

Multiplication Factor= N= 2*100=200.

The total cost of the item after interest is charged= 20,000 + 300 = 20,300 INR. None of the options satisfy; since we see the close option A) 23,000 we can choose this. We can get 3000 as interest if the “interest” rate is 15% and NOT 1.5% (question has a typo).

We should understand that if the exchange rate was not 17.5 but a random value as 16.78 , it would have been difficult to calculate like this- but then the question would not test “aptitude” or “quantitative/numerical ability” that way. We advise the students to try mental calculation wherever possible!

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