Question

3.
Yatin borrowed 1,20,000' from a bank at the rate of
12% per annum for 4 years at simple interest. He lent
this money to his friend at the same rate at
compounded annually. Find his gain in this
transaction.​

Answer 1

Answer:

borrowed from bank

s.i. = 120000×12×4/100

s.i. = 57600

total amount = 177600

borrowed from friend

c.i. = 120000(1+12/100)^4 - 120000

= 120000(112/100)^4 -120000

= 12×112×112×112×112/100×100 - 120000

= 188822.3232 - 120000

= 68822.3232

total amount = 188822.3232

gain in this transaction = 188822.3232-177600

= 11222.3232 rupees ans.