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Simple & Compound Interest · Question 19 of 60

Question 19

MediumOriginal question

Sneha borrows a sum at 7% per annum simple interest and immediately lends it at 10% per annum simple interest. She gains ₹1,800 in 3 years. How much did she borrow?

Options for question 19

Show the answer and explanation
CorrectNot quiteAnswer A

Correct answer: A

Explanation

  1. Her gain comes from the difference in rates: 10%−7%=3%10\% - 7\% = 3\% per year.

  2. Over 3 years she gains 3×3%=9%3 \times 3\% = 9\% of the sum.

  3. 9% of the sum = ₹1,800, so the sum = 1800×100÷91800 \times 100 \div 9 = ₹20,000.

Worth noting

Forgetting the 3 years gives ₹60,000, and using 2% as the gap gives ₹30,000. The gain each year is only the 3% gap, and it builds for 3 years.

Concept
Gain from borrowing and lending at different rates
Typical time
55 s
Your time
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The rule this testsSimple interest
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