Amar borrowed 2000 rupees 30 % per annum simple interest and then immediately lent it at 30% percent per annum compound interest .find his gain at the end of 2 years
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Answer:
Principal Amount borrowed =Rs 1,00,000.
Money is borrowed at S.I.
T=2 years
R=10%
∴ Amount after two years =P(1+
100
R.T
)
=1,00,000(1+
100
2×10
)
=1,00,000×
5
6
=1,20,000
The borrowed money is lent by John on C.I. at same rate for same time.
∴ Amount that John will receive =A
⇒A=P(1+
100
R
)
T
=1,00,000(1+
100
10
)
2
=1,00,000(
10
11
)
2
=1,21,000
∴ John will get 1,21,000 while be will have to pay 1,20,000
∴ Gain =Rs (1,21,000−1,20,000)
=Rs 1,000
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