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A debtor can pay 87 paise in the rupee, but if his creditors would take 20% of his debts, he could pay them and have Rs. 42 left. Calculate his debts and assets.

I don't understand the bold part of the sentence. Please help me to understand this question.

Vibhu
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  • how many paise in 1 rupee? – danimal May 06 '15 at 13:10
  • @danimal - Rs. 1= 100 paise. – Vibhu May 06 '15 at 13:14
  • so 87 piase in the rupee means 87% – danimal May 06 '15 at 13:15
  • @danimal - okay. But what does it mean if you read the whole sentence including the bold part? Does it mean that debtor have to pay 87%? But if creditors get 20%, thus debtor has to pay 67%? – Vibhu May 06 '15 at 13:19
  • Also "his creditors would take 20% of his debts" - just checking, does that mean he would have to pay 80% of his debt or 20% of his debt? – Joffan May 06 '15 at 13:19
  • @Joffan : But what does 87 paise in the rupee mean then? – Vibhu May 06 '15 at 13:24
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    presumably, his assets are 87% of his debts, and the 20% is the proportion of his debts the creditors would take off his hands... – danimal May 06 '15 at 13:25
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    It means he has enough assets to pay 87% of his debt. He can't pay in full, so for each rupee they are owed the creditors would only receive 87 paise. The word "but" separates that scenario from the "20% of debts" scenario, so I don't read that 87% concept as active thereafter in the question. – Joffan May 06 '15 at 13:27
  • @danimal & Joffan : Thanks! – Vibhu May 06 '15 at 13:29

1 Answers1

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Given assets $a$ and debts $d$ (in rupees), the "87 paise in the rupee" $\implies a= 0.87d$

The "creditors would take 20% of his debt" alternative I interpret as $a= 0.8d+42$

Subtracting these gives $0.07d = 42$

Joffan
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