Question

madhulika took a loan of rupees 20000 from a bank at 8% per annum and lent it on the same day to her colleague the nilima for 2 years at 10% per annum how much did she gain
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Answer 1

Principle amount(P) = 20000;

Rate of interest(R) = 10%;

Time(T) = 2.5 Years

Simple interest = PRT/100;

= 20000*10*2.5/100 = 5000;

Compound Interest - P{1+ R/100}^T; Here rate of interest count as half yearly;

=

So R = R/2 and T = 5;

= 20000[1 + 10/2*100]^5;

= 20000[1.05]^5; = 20000*1.27 = 25525.6

Gain = Compound Interest - Simple Interest;

Gain = 25525.6-5000 = 20525.6