Question

A man borrows money at 3% per annum interest payable yearly and lends it immediately at 5% per annum, interest payable half-yearly and gains there by Rs 165 at the end of a year. What sum of money does he borrow?

(a) Rs 6000

(b) Rs 7500

(c) Rs 8000

(d) Rs 9000

Answer 1

Correct option is (c) Rs 8000

If principal = ₹8000

Case I, When given on 3% interest p.a. then interest would be 3% on 16000 = ₹240

Case II, When given on 5% interest (compound) payable half-yearly then interest would be

8000 x \(\frac 52\)% = 200

8000 + 200 = 8200

8200 x \(\frac 52\)% = 205

Total interest  = (200 + 205) = ₹ 405

Difference of interest = ₹ (405 - 240) = ₹165