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

 

  • Correct Answer
    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) = which on simplifying becomes . Thus greater than 5000 but less than 6000.So,

Answer is (b).

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



Our Online Course, Now on Google Playstore!

2IIM's App

Fully Functional Course on Mobile

All features of the online course, including the classes, discussion board, quizes and more, on a mobile platform.


Cache Content for Offline Viewing

Download videos onto your mobile so you can learn on the fly, even when the network gets choppy!

Get it on Google Play