A borrows a sum of ₹90,000 for 4 years at 5% simple interest. He lends it to B at 7% for 4 years at simple interest. What is his gain (in ₹) ?
Answer & explanation
Correct answer: option 1
A borrows at 5% for 4 years
⇒ Total int. = 5 × 4 = 20%
A lends to B at 7% for 4 years
⇒ Total int. = 7 × 4 = 28%
A's Profit = 28% - 20% = 8%
A's total profit = 90000 × 8% = Rs 7200