Mewa Lal borrowed Rs 20000 from his friend Rooplal at 18% per annum simple
interest. He lent it to Rampal at the same rate but compounded annually. Find his
gain after 2 years.
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Given :
- Mewa Lal borrowed Rs 20000 from his friend Rooplal at 18% per annum simple interest. He lent it to Rampal at the same rate but compounded annually.
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Find :
- What is the gain after 2 years.
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Using formula :
★ Simple interest = Principal × Rate × Time/100.
★ Overall profit = Profit - Simple interest.
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Calculations :
→ Interest = 20000 × 18 × 2/100
→ Interest = 7200
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Therefore, 7200 is the interest he has to pay.
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Finding his profit after two years :
→ 20000 (1 + 18/100)² - 20000
→ 27848 - 20000
→ 7848
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Therefore, 7848 is his profit as interest after talking loan.
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Finding his overall profit :
→ 7848 - 7200
→ 648
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Therefore, 648 is his overall profit.
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