Question

Priyanka borrowed $Rs8,000$ at $12\%$ simple interest for $3$years and lent it to Renu for $3$ years at $15\%$ per annum compound interested, compounded annually, Priyanka's profit at the end of $3$ years is

• A. $Rs.2,880$
• B. $Rs.1,287$
• C. $Rs.4,167$
• D. none of these

Answer 1

Answer: (B)

$Rs.1,287$

For Simple interest part,

Principal$\left(P\right)=8000$

Time$\left(T\right)=3yrs$

Rate of interest $\left(R\right)=12\%$

We know,

$SI=\frac{PRT}{100}$

$SI=\frac{8000\times 3\times 12}{100}=2880$

Now, for compound interest,

Here, rate of interest$\left(R\right)=15\%$

$A=P(1+\frac{R}{100}{)}^T$

$A=8000(1+\frac{15}{100}{)}^3=8000\times (\frac{115}{100}{)}^3=12167$

$CI=A-P=12167-8000=4167$

Therefore profit$=(4167-2880)=1287$

Option $\text{B}$ is correct