S borrowed some amount from R and promised to pay him 8% interest. Then S invested the borrowed amount in a scheme, upon which he earned a profit of 5% after paying R, the principal amount with interest. How much percentage R would have gained, if he would have invested in the scheme directly?

Options
a) 14%
b) 13%
c) 14.4%
d) 13.4%

Solution

As per question
S borrowed money from R at 8% interest
S invested the borrowed amount in a scheme
After paying R (principal + interest), S gained 5% profit
Let the principal = 100 Rs.
Interest payed to R = 8 %
Time = 1 Year
S.I = $\frac{P \times R \times T}{100}$
S.I = $\frac{100 \times 8 \times 1}{100}$
S.I = $\frac{8}{100}$ = 8
Amount = P + S.I
Amount = 100 + 8 = 108
S earned enough to pay R = 108 Rs.
5% profit on initial amount = $\frac{5}{100} \times 100$ = 5
Total earning = 108 + 5 = 113 Rs.
Initial investment would be = 100
Final amount would be = 113
gained % = $\frac{113-100}{100} \times 100$ = 13%