Stock Gain and Simple Interest
XAT 2023 · Quantitative Ability & Data Interpretation · Medium · Simple Interest
Jose borrowed some money from his friend at simple interest rate of 10% and invested the entire amount in stocks. At the end of the first year, he repaid 1/5th of the principal amount. At the end of the second year, he repaid half of the remaining principal amount. At the end of third year, he repaid the entire remaining principal amount. At the end of the fourth year, he paid the last three years' interest amount. As there was no principal amount left, his friend did not charge any interest in the fourth year. At the end of fourth year, he sold out all his stocks. Later, he calculated that he gained Rs. 97500 after paying principal and interest amounts to his friend. If his invested amount in the stocks became double at the end of the fourth year, how much money did he borrow from his friend?
- A.
250000
- B.
200000
- C.
150000
- D.
125000
- E.
None of the above
D
Explanation
Let borrowed principal = . Year 1 principal = , repaid remaining . Year 2 principal = , repaid remaining . Year 3 principal = , repaid remaining . Interest accumulated: Year 1: . Year 2: . Year 3: . Total interest = . Stock value after 4 years = . Profit = .
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