A borrows a sum of ₹3,500 for 6 years at 5% p.a. simple interest. He lends it to B at 9% p.a. for 3 years. What is his gain or loss?
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. ₹105 loss.
A’s interest paid: 3500 × 5% × 6 = 3500 × 0.05 × 6 = ₹1050
A’s interest received: 3500 × 9% × 3 = 3500 × 0.09 × 3 = ₹945
Loss = 1050 − 945 = ₹105