Question

A man borrows some money at 3% S.I. per annum and lends it to somebody at 5% interest compounded annually.By this, he makes a profit of Rs 541 in 3 years.How much did he borrow?

Answer 1

Let the amount he has borrowed is  P
                                       Time     n = 3
By borrowing at 3% interest he has to payback = P.r.n + P
                                                                     = P*3*3/100 +P
                                                                     = 1.09P
By lending, the total amount he makes = P(1+5/100)³
                                                         = P(1.05)³
we have P(1.05)³ - 1.09P= 541
          ⇒     P(0.067625) = 541
          ⇒     P = 8000 Rs
He borrowed Rs 8000

Answer 2

Answer

8000 is the right answer