Amit borrowed Rs. 16000 at 17 % per annum simple interest. On the same day, he lent it to Ashu at the same rate but compounded annually. What does he gain at the end of 2 years?

Question

Philoid · Accepted Answer

Given,

Principal = Rs.406

Rate = 12% per annum = semi annually

Time = 18 months =

Hence,

Amount = Principal = Rs.16000

Rate = 17 % =

Time = 2 years

Hence ,

Interest paid by Amit on this sum =

Interest that Amit get from Ashu = Compound interest =

Hence,

Gain of Amit = Rs.(6090 – 5600 ) = Rs. 490

Amit borrowed Rs. 16000 at 17% per annum simple interest. On the same day, he lent it to Ashu at the same rate but compounded annually. What does he gain at the end of 2 years?