Question

Rohit borrows Rs 62500 from Arun for 2 years at 10% per annum, simple interest. He immediately lends out this sum to Kunal at 10% per annum for the same period, compounded annually. Calculate Rohit's profit in transaction at the end of two years.

Answer 1

Rohit borrowed = Rs 62500, T = 2 years, R = 10%
SI = 62500*2*10/100 = 12500
So rohit has to give interest Rs 12500

Rohit lent same amount for same time and rate at comound interest
Amount after 2 years = 62500(1+10/100)2 = Rs 75625
Comound interest = 75625 - 62500 = Rs 13125

Profit in this transaction = 13125 - 12500 = Rs 625 

Answer 2

Step-by-step explanation:

Rohit borrows 62500 from Arun for 2 years at 10% per annum, simple interest. He immediately lends out this sum to Kunal at 10% per annum for the same period, compounded annually. Calculate Rohit's profit in the transaction at the end of two years.