Question

Sam borrowed $ 500 from a bank at 9 % per annum for 2 years. Then he lent this sum to Rockey at 10 % per annum for the same period. Sam gained(in dollars) from this transaction.

Answer 1

Calculating: Simple Interest paid by Sam
Principal amount $P=\$500$
Rate of interest $R=9\%$
Time Period $T=2$ years.

$\because SI=\frac{P\times R\times T}{100}$

On substituting given values in the above equation, we get,

$\Rightarrow SI=\frac{500\times 9\times 2}{100}=\$90$

Calculating: Simple Interest paid by Rockey
Principal amount $P=\$500$
Rate of interest $R=10\%$
Time Period $T=2$ years.

$\because SI=\frac{P\times R\times T}{100}$

On substituting given values in the above equation, we get

$SI=\frac{500\times 10\times 2}{100}=\$100$

The amount of money gained by Sam is $\$100-\$90=\$10$