Question

4. Rohit borrows Rs. 86000 from Arun for two years at 5% per annum simple interest. He immediately lends out this money to Akshay at 5% compound interest compounded annually for the same period. Calculate Rohit's profit in the transaction at the end of two years.

Answer 1

Answer:

yes

Step-by-step explanation:

86,000 at 5% S.I for 2 years. S.I = P*R*T/100 = 86000*5*2/100 = 8600 Rs.

86000 at 5% C.I for 2 years

C.I for 1st year = 86000*5*1/ 1004300

A= P + C.I = 86000 + 4300 = 90,300

This becomes the P for 2nd year 90,300 at 5%

C.I for second year = 90300 *5 * 1/100 = 4515

Total C.I = 4300 + 4515 = 8815 Rs.

Rohit has to pay Arun Rs.8600

But Rohit receives from Akshay Rs. 8815

Hence Rohit's profit = 88158600 Rs. 215 Hope it helps.