A moneylender takes advantage of difficult situation of poor people and charges 50 interest However ...........

Quant (SSC) Profit and loss

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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 the second year?

Rs 4,900

Rs 5,200

Rs 5,000

Rs 6,000

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Explanation:

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) = (25000/172.8) ∗ 36 which on simplifying becomes 25000/4.8.
Thus greater than 5000 but less than 6000.
So, he gave Rs.5200 as bribe at the end of the second year.

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