A man purchased a car for Rs.12 lakhs and was insured for 80% of the cost. He sold the car at a 15% loss but had not yet delivered it to the buyer when he met with an accident. After the accident, the car was damaged a lot and the insurance company paid 90% of the insured amount. The net difference in the two transactions is:
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e Rs.1.56 lakhs
Amount paid by the insurance company
⇒ 12,00,000 × (80 / 100) × (90 / 100) = Rs. 8,64,000
Sellng after loss
⇒ 12,00,000 × (85 / 100) = Rs. 10,20,000
Difference = 10,20,000 - 8,64,000 = Rs. 1,56,000