# CAT Practice : Percents, Profits

Moneylender

## Moneylender

Q.24: A moneylender takes advantage of difficult situation of poor people and charges 50% interest. However he never gets caught because he gives 20% of his total capital (initial capital + profit) as bribe. If in the beginning of 4th year, he has a capital of Rs 25,000 to invest, how much bribe did he give at the end of 2th year?
1. Rs 4,900
2. Rs 5,200
3. Rs 5,000
4. Rs 6,000

Choice B. Rs 5,200

## Detailed Solution

Let the moneylender has Rs 100 initially. 1st year ---> 100 + 50 (interest) ---> 150 – 20% bribe ---> 120

2nd year ---> 120 + 60 (interest) ---> 180 – 20% bribe ---> 144

3rd year ---> 144 + 72 (interest) ---> 216 – 20% bribe ---> 172.8 (This is the capital he will have at the beginning of 4th year)

So, if 172.8 --> 25,000

= ) 36 (bribe given in 2nd year) = $\frac{25000}{172.8} * 36$ which on simplifying becomes $\frac{25000}{4.8}$. Thus greater than 5000 but less than 6000.So,

Note – Never go for solving the entire calculation in such type of questions. Most of them can be managed using the options. Saves a lot of precious time

Correct Answer: Rs 5,200

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