GATE 2025 AR — Architecture – Question 43
A₹50 lakh property offers full down payment with 8% rebate, or deferred payments₹10 lakh now, ₹15 lakh after 1 year, ₹15 lakh after 2 years and₹10 lakh after 3 years. At 10% annual discount, find present-value saving from the deferred plan in₹lakh, to two decimals.
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Show answer and explanation
Correct answer: 2.3 to 2.7
Explanation
The full-down-payment price is 50×(1−0.08)=46 lakh. Discount each deferred payment to booking time:10+15/1.1+15/1.1²+10/1.1³=43.54621 lakh. Therefore the saving from deferred payment is 46−43.54621=2.45379 lakh, or₹2.45 lakh. Although the deferred nominal sum is 50 lakh, its discounted value is lower than 46 lakh.