Question

Amit borrowed ₹1,00,000 from Ajay and then Ajay borrowed ₹1,50,000 from bank. Amit returns monthly ₹5,000 to Ajay for two years and Ajay returns monthly ₹7,000 to the bank for 2 years . Who among them paid more interest?

• A.
  Ajay
• B.
  Both
• C.
  Amit
• D.
  None

Answer 1

The correct option is C

Amit
Money borrowed Amit from Ajay = ₹1,00,000
Money borrowed Ajay from Bank = ₹1,50,000
Money returns every month by Amit = ₹5,000
So, the money returned by Amit in 2 years = ₹5,000 × 24 = ₹1,20,000
Interest paid by Amit = ₹1,20,000 - ₹1,00,000 =20,000
Money returns every month by Ajay = ₹7,000
So, the money returned by Ajay in 2 years = ₹70,000 × 24 = ₹1,68,000
Interest paid by Ajay = ₹1,68,000 - ₹1,50,000 = ₹18,000
So, Amit paid more interest than Ajay .