Multiple choice

Passage

Directions: Read the following passage and answer the question. A, B, C, D and E are five friends. They started a business. The amount invested by A, B, C, D and E was Rs. 30,000, Rs. 40,000, Rs. 60,000, Rs. 50,000 and Rs. 70,000, respectively. After 6 months, A, C and E increased their initial investment by 20%, 30% and 40%, respectively. At the end of the year, they earned a total profit of Rs. 1,38,000 and the profit is shared to individuals in the ratio of their investment. At the end of the year, person X borrows the profit share of A at 12% simple interest for 5 years and person Y borrows the profit share of D at 10% simple interest for 5 years. The person Z borrows E's profit share for 2 years at the rate of 20% compound interest.

Find the compound interest, person Z has to pay for person E for given time.

  1. Rs. 18,480

  2. Rs. 17,500

  3. Rs. 15,300

  4. Rs. 20,040

  5. Rs. 18,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A's initial 30k becomes 36k after 6 months. C's 60k becomes 78k. E's 70k becomes 98k. Total investment units: A(30*6 + 36*6) = 396, B(40*12) = 480, C(60*6 + 78*6) = 828, D(50*12) = 600, E(70*6 + 98*6) = 1008. Total ratio sum = 3312. E's share = (1008/3312) * 138000 = 42000. Compound interest on 42000 at 20% for 2 years = 42000 * (1.2^2 - 1) = 42000 * 0.44 = 18480.

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