Question

Mr. Sharma borrowed Rs. 24000 at 13% p.a. simple interest and an equal sum at 12% p.a. compound interest. Find the total interest earned by Mr. Sharma in 2 years.

Answer 1

Sum borrowed(P)=Rs. 24000
Rate(R)=13% p.a.
Time(T)= 2 years
In case of simple interest,
S.I. for 2 years= $\frac{PTR}{100}$
$=Rs.\frac{24000\times 13\times 2}{100}=Rs.6240$
In case of compound interest,
Interest for the first year= $\frac{24000\times 12\times 1}{100}$
=Rs. 2880
Amount after first year
=Rs. 24000 +2880= Rs. 26880
Interest for second year= Rs. $\frac{26880\times 12\times 1}{100}$
$=Rs.\frac{322560}{100}=Rs.3225.60$
$\therefore$ C.I. for 2 years=Rs. 2880+3225.60
=Rs. 6105.60
Total interest= Rs. 6240 +6105.60
=Rs. 12345.60