Question

A borrows a sum of Rs.9,000 for 3 years at 5% simple interest. He lends it at simple interest to B at 7% for 3 years. What is his gain (in Rs.)?
1. 700
2. 540
3. 600
4. 450

Answer 1

Correct Answer - Option 2 : 540

Given

A borrows a sum of Rs.9,000 for 3 years at 5% simple interest

He lends it at simple interest to B at 7% for 3 years

Formula used

SI = (P × R × T)/100

SI = Simple Interest

P = Principal

R = Rate

T = Time

Calculation

Principal = 9000

⇒ SI for A = (9000 × 3 × 5)/100

⇒ SI = Rs.1350

⇒ He lends to B at 7% for 3 years

⇒ SI = (9000 × 7 × 3)/100

⇒ SI = Rs.1890

⇒ Profit = 1890 - 1350 

⇒ Rs.540

∴ His gain is Rs.540