Correct Answer - Option 1 : 3750
Given:
The present monthly income of Rahul = Rs. 3675
Rahul's annual income increases by 5% every year
The ratio of the annual incomes of Rahul and Vijay two years ago = 8:9
Formula Used:
New income = [(100 + income increment percentage)/100] × Present Income
Calculation:
Assume Rahul's annual income 2 years ago = x
and Vijay's annual income 2 years ago = y
∵ Rahul's annual increment in income= 5%,
Rahul's annual income today = [(100 + 5)/100]2 × x
Also, Rahul annual income today = Rs. 3675 × 12 = Rs.44100
We can obtain Rahul's annual income, two years ago
[(100 + 5)/100]2 × x = 44100
⇒ (441/400) × x = 44100
⇒ x = 40000
∵ The ratio of the annual incomes of Rahul and Vijay two years ago = 8:9,
We can obtain Vijay's annual income, two years ago, as:
x/y = 8/9
⇒ 40000/y = 8/9
⇒ y = 45000
Vijay's monthly income two years ago is obtained as:
45000/12 = Rs.3750
∴ Vijay's monthly income two years ago was Rs.3750
Mistake Point:
It is important to note here that we have been asked Vijay's monthly income two years ago, and not his annual income two years ago. If a candidate considers the annual income two years ago as the answer, then Rs.45000 would be the answer; which would be the wrong answer for this question.