Question

Mr sharma borrowed rs 20000 from his friend Mr base at the rate of 18% per annum simple interest for 2 years.He lent this money to Mr Gupta at the same rate but compounded annually find his gain after 2 years

Answer 1

P = rs 20000
R = 18 %p.a
T = 2 years
SI = PRT/100 = 20000 * 18 * 2/100 = 400 * 18 = 7200 rs
A₁ = 20000 + 7200 = 27200
A₂ = 20000(1 + 18/100)² = 20000(59/50)² = 20000 * 59 * 59/2500 = 8 * 59 * 59 = 27848
Therefore his gain = A₂ -A₁ = 27848 - 27200 = 648 rs

Answer 2

Principal = 20000
Rate=18%per annum
Years = 2
Simple interest = P*R*T/100
2000*18*2/100
720
Amount =P*(1+r/100)t
20000 *(1+18/100)2
20000 *(100+18/100) 2
20000 *(118/100)2
20000 *118/100*118/100
27848
Compound interest =amount - principal
27484-20000
7484
Required amount = Compound interest - Simple interest
=7484-720
=6789 answer