Question

A man borrowed rs 800 at 10 % p.a. simple interest and immediately lend the whole sum at 10% p.a. compound interest. what does he gain at the end of 2 years?

Answer 1

16.rs

please thank...........

Answer 2

Calculation of the compound interest:

Compound Interest (C.I.) = Rs. [800 × (1 + 10/100)^2 − 800] = Rs.168

Now the simple interest is:

S.I. = (P*R*T) / 100

Simple Interest (S.I.) = Rs. (800×10×2) / 100 = Rs.160

Gain at end of 2 years = C.l. - S.I.

= Rs. (168−160) = Rs. 8