Question

4. Sanjay borrowed 12,800 at the rate of 25/4% per annum at simple interest. On the same day, he lent

it to Rajesh at the same rate but compounded annually. What does Sanjay gain at the end of 2 years?​

Answer 1

Step-by-step explanation:

In 1st case,

Simple Interest = Principle*Rate*Time/100 = 12800*25/4*2/100= 1600

Amount = Principle + SI = 12800+1600 = $14400

In 2nd case,

Amount = P(1+R/100)^n

= 12800(1+25/4/100)²

=12800*(1+25/400)²= 12800*425/400*425/400 = $14450

Gain = 14450-14400 = $50

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