The Student Room Group

I cannot get the answer for this TSA question helpppppp

18. The island Republic of Outlandia has three banks, Barkers, Floyds and National. During a particular day Barkers customers have written cheques worth three million Lira to Floyds customers and cheques worth four million Lira to National customers. Floyds customers have written cheques worth four million Lira to Barkers customers and cheques worth five million Lira to National customers. National customers have written cheques worth three million Lira to Barkers customers and cheques worth two million Lira to Floyds customers. The banks could settle all the debts to each other that arise because of these cheques by:

A Floyds Bank paying one million Lira to Barkers Bank and Barkers Bank paying one million Lira to National Bank.

B Floyds Bank paying three million Lira to National Bank.

C Floyds Bank paying four million Lira to National Bank.

D Barkers Bank paying one million Lira to National Bank.

E Barkers Bank paying four million Lira to National Bank.


We can ignore Barkers bank as it cancels out.
Floyds gives 9 mil and recieves 5 mil
National gives 5 mil and recieves 9 mil

so why is the answer for F to give N 4 mil as wouldnt this mean F gives a total of 13 mil and receives 5 mil, N gives 5 mil and recieves 13 mil. THIS ISN'T BALANCED AND IM SO FRUSTRATED!!!!

I just see the answer as the other way round and I can't understand why F would give more even though it has already given loads more than recieved, and N has recieved more than it has given yet the answer says it should recieve more.

pleassseeeee can someone exaplin. you have no idea how long i have been stuck on this. I am going mad.
Everything you've done with the numbers is correct. The part you're misunderstanding is what a cheque actually is.

Think of a cheque like an IOU (before it is cashed). By the end of the day, F is on -4 mil ie it has given 4 million in IOUs more than it has received, meaning it owes 4 mil. On the other hand, N is on +4 mil ie it has received 4 million in IOUs more than it has given, meaning it is owed 4 mil. Therefore, this could be settled by F paying N 4 mil.

Hope that helps!
Reply 2
Original post by honeydukes01
Everything you've done with the numbers is correct. The part you're misunderstanding is what a cheque actually is.

Think of a cheque like an IOU (before it is cashed). By the end of the day, F is on -4 mil ie it has given 4 million in IOUs more than it has received, meaning it owes 4 mil. On the other hand, N is on +4 mil ie it has received 4 million in IOUs more than it has given, meaning it is owed 4 mil. Therefore, this could be settled by F paying N 4 mil.

Hope that helps!

Ohhh yes thank you. I thought I was misunderstanding the question. so when you give a cheque to someone you are giving that person your money. wait no i'm still confused. I get what you've said but then if you are on -4mil then surely you need to gain 4 mil to be 0, so why would you give away more money. surely that would make the net loss greater.
i feel like this is so simple to understand but i cant get it!
Original post by anom.econ
Ohhh yes thank you. I thought I was misunderstanding the question. so when you give a cheque to someone you are giving that person your money. wait no i'm still confused. I get what you've said but then if you are on -4mil then surely you need to gain 4 mil to be 0, so why would you give away more money. surely that would make the net loss greater.
i feel like this is so simple to understand but i cant get it!

No - when you give them a cheque, you are giving them an IOU. It is a slip of paper to say you owe them money (until they cash it). If you're on -4mil then you owe 4mil worth of money as you have given 4mil worth of IOUs out. To settle this, you must pay the 4mil so that you are no longer owing - this amount of money needs to be removed from your account and transferred to the recipient's account.
(edited 3 years ago)
Original post by honeydukes01
No - when you give them a cheque, you are giving them an IOU. It is a slip of paper to say you owe them money (until they cash it). If you're on -4mil then you owe 4mil worth of money as you have given 4mil worth of IOUs out. To settle this, you must pay the 4mil so that you are no longer owing - this amount of money needs to be removed from your account and transferred to the recipient's account.

I tried this question too and was confused on the same thing. After calculating everything F was left with -4 and N with +4 so at first it didn't make sense with F still having to pay 4 out when it was negative. Now I know that if it's -4 it just means that F still owes 4 (not that it needs to add 4 more in order to reach 0)
Thanks so much for your explanation on cheques! :smile:

By the way, whenever you come across a TSA question you don't understand even after looking at the answers, what is your method to trying to understand a question you got wrong? Because sometimes even after trying for ages on a question, I still can't understand it and just have to give up on it since I haven't got any teachers to help me with this sort of thing or anyone to ask help from!

Quick Reply