Question

Sanjay borrowed $Rs12,800$ at the rate of $\frac{25}{4}\%$ per annum at simple interest. On the same day, he lent it to Raiesh at the same rate but compounded annually. What does Sanjay gain at the end of $2$ years?

Answer 1

Given:

$P=12,800$

$R=\frac{25}{4}\%$

$T=2years$

$SI=\frac{PRT}{100}=12800\times \frac{25}{4}\times 2\times \frac{1}{100}$$=1600$

Amount $=12800+1600$$=14400$

CI for 2 years $=P(1+\frac{R}{100}{)}^T$

$=12800(1+\frac{25}{400}{)}^2$

$=12800\times \frac{289}{256}$

$=14450$

Profit $=14450-14400$ $=50Rs$