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GATE 2020 EE – Question 6

General Aptitude · Quantitative Aptitude: Arithmetic and Number Computation · 2 marks · Multiple choice

Non-performing Assets (NPAs) of a bank in India is defined as an asset, which remains unpaid by a borrower for a certain period of time in terms of interest, principal, or both. Reserve Bank of India (RBI) has changed the definition of NPA thrice during 1993-2004. The holding period was reduced by one quarter each time. In 1993, the holding period was four quarters (360 days).

Based on the above paragraph, the holding period of loans in 2004 after the third revision was ________ days.

  1. 45
  2. 90
  3. 135
  4. 180

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Correct answer: (B) 90

Explanation

Each revision reduces the holding period by one quarter (90 days). Starting at 360 days, after three revisions it is $360-3\times90=90$ days.