Q. A person borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 4% p.a. compound interest for 2 years. Find his gain in the transaction.

No gain

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10 Rs.

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8 Rs.

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20 Rs.

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Solution

The correct option is C 8 Rs.
CI obtained for 2 years = 5000(1.04) $^{2}$ - 5000 = 408
SI obtained for 2 years $= 5000 \times 4 \times \frac{2}{100} = 400$
Gain = 408-400 = 8

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Q. A person borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends it to another person at 4% p.a. compound interest for 2 years. Find his gain in the transaction.

The correct option is C 8 Rs.CI obtained for 2 years = 5000(1.04)2 - 5000 = 408 SI obtained for 2 years =5000×4×2100=400 Gain = 408-400 = 8

The correct option is C 8 Rs.
CI obtained for 2 years = 5000(1.04) $^{2}$ - 5000 = 408
SI obtained for 2 years $= 5000 \times 4 \times \frac{2}{100} = 400$
Gain = 408-400 = 8