Suppose you earn ₹100 on the first day of every month and run down this balance evenly over the rest of the month, then your cash balances (in ₹) at the beginning and the end of the month are:
- A50 and 0
- B100 and 0
- C0 and 100
- D50 and 50
Solution & Step-by-step Explanation
According to the question:
At the beginning of the month, you receive the full earning of ₹100. So, the cash balance is ₹100.
You spend this balance evenly across the month until it is completely exhausted by the last day.
Therefore, at the end of the month, the remaining cash balance becomes ₹0.
At the beginning of the month, you receive the full earning of ₹100. So, the cash balance is ₹100.
You spend this balance evenly across the month until it is completely exhausted by the last day.
Therefore, at the end of the month, the remaining cash balance becomes ₹0.