Question

harpreet borrowed Rs 20000 from her friend at 12%per annum simple interest,she lent it to rina at the same rate but compounded annually .Find her gain after 2 yrs​

Answer 1

Given:-

• harpreet borrowed Rs 20000 from her friend at 12%per annum simple interest,she lent it to rina at the same rate but compounded annually .

To find:-

• Find her gain after 2 yrs....?

Solutions:-

Principal amount = Rs 20000

Simple interest = Rs (20000 × 2 × 12 /100)

= Rs 200 × 2 × 12

= Rs 4800

Compound interest

Principal for the first years = Rs 20000

Interest for the first year = Rs (20000 × 12 × 1 /100)

= Rs 200 × 12 × 1

= Rs 2400

Now,

Amount at the end of the first years

= Rs (20000 + 2400)

= Rs 22400

Principal for the second year = Rs 22400

Interest for the second year = Rs (22400 × 12 × 1 / 100)

= Rs (22400 × 12 × 1 / 100)

= Rs 224 × 12

= Rs 2688

Amount at the end of the second year

= Rs (22400 + 2688)

= Rs 25088

Compound interest = Rs (22400 - 2688)

= Rs 25088

Now,

Difference between the simple interest and the compound interest

= (CI - SI)

= Rs (5088 - 4500)

= Rs 288

Hence, the amount of money Harpreet will gain after two years is Rs 288