Borrowing cheap and lending dear — Aptitude Question
Borrowing cheap and lending dear: A man borrows ₹5,000 at 4% simple interest and lends it at 6% for 3 years. Answer and worked solution on CodeKairo.
- Topic: Simple & Compound Interest
- Section: Quantitative Aptitude
- Difficulty: Medium
- Time target: 60 seconds
Question
A man borrows ₹5,000 at 4% simple interest and lends it at 6% for 3 years. What is his total gain?
Options
- ₹200
- ₹300
- ₹400
- ₹600
Show the answer and the worked solution
Correct answer: B. ₹300
Worked solution
- Gain per year = (6 − 4)% of 5,000 = ₹100.
- Over 3 years = ₹300.
Answer: ₹300.
The idea
Work with the difference in rates rather than computing both interests. The principal and time are shared, so only the rate gap matters.
Shortcut. One step: the 2% gap for 3 years is 6% of 5,000 = ₹300.
Common trap. ₹600 — that is the interest he pays on the loan (4% × 3 years of ₹5,000), not his gain; the gain is only the 2% margin.
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