Question

Jose borrowed some money from his friend at a 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

Answer 1

The Correct Option is D

Let Jose borrow ₹X from his friend.
Total amount paid to his friend = ₹ 1.22X
He received ₹2X in the stocks.
Given: 2X - 1.22X = 97500
0.780X = 97500
X = 1,25,000
Hence, option D is the correct answer.