Example 32
The company policy states that for a short-term loan
on simple interest for 2 years, the rate of interest is
20%. A new recruit did not know it and he negotiated
with a very tough customer for a 18% loan.
What is the percentage of reduction in the earnings?
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Answer:
SI1 = P*20*2/100
= P*2/5
SI2 = P*18*2/100
= 9/25
% reduction in earning = (20-18)/20 *100
= 2*100/20 = 10 %
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