Question

A moneylender borrows money at 8% per annum and pays the interest at the end of the year. He lends it at 16% per annum compounded half-yearly and receives the interest at the end of the year. In this way he gains Rs. 6048. The amount of money he borrowed?
1. Rs 7000
2. Rs 80000
3. Rs 70000
4. Rs 8000

Answer 1

Correct Answer - Option 3 : Rs 70000

Calculation:

Effective rate of interest he lent

= 8 + 8 + \(8 × 8 \over 100\)(Since half-yearly)

=16.64%

% gain = 16.64 - 8 = 8.64%

As per question,

8.64 ⇒ Rs 6048

100 ⇒ Rs 70000

If nothing about the type of interest is given in the question, it is taken as Simple Intrest.