The income of a broker remains unchanged though the rate of commission is increased from 4 per cent to 5 per cent. The percentage of slump in business is:

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INSURANCE EXAMS (LIC) 2009 click here to view all questions

The income of a broker remains unchanged though the rate of commission is increased from 4 per cent to 5 per cent. The percentage of slump in business is:

A10 percent

B15 percent

C20 percent

D30 percent

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Correct answer is: 20 per cent Explanation: Let the business value changes from Rs.x to Rs.y. Therefore, 4% of x = 5% of y $\implies \Large \frac{4x}{100} = \frac{5y}{100}$ $\implies y = \Large \frac{4}{5}x$ Change in business $= \Large \left(x - \frac{4}{5}x\right)=\frac{x}{5}$ Therefore, Percentage slump in business $= \Large \frac{x}{5} \times \frac{1}{x} \times 100 = \text{20 %}$ Nithin ? answered Aug 10 '2022 at 20:14 All Comments

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