Question

Sara borrowed of $Rs.5,000$ from the bank at the rate of $10$% for $3$ years. She given the amount to Sheela for $3$ years at the rate of $12$% per annum. Find out the profit Sara made from the transaction.

Answer 1

Case I: Principal value$P=5000$/-

Rate$=r=10\%$

Time $n=3$years

So,

$A_1=P{(1+\frac{r}{100})}^n$

$A_1=5000{(1+\frac{10}{100})}^3$

$A_1=5000\times \frac{11}{10}\times \frac{11}{10}\times \frac{11}{10}$

$A_1=5\times 11\times 11\times 11$

$A_1=6655$

Now, Case II:

Principal value$=P=5000$/-

Rate$=r=12\%$

Time $n=3$ years

So,

$A_2=P{(1+\frac{r}{100})}^n$

$A_2=5000{(1+\frac{12}{100})}^3$

$A_2=5000{(1+\frac{3}{25})}^3$

$A_2=5000\times {\left(\frac{28}{25}\right)}^3$

$A_2=5000\times \frac{28\times 28\times 28}{25\times 25\times 25}$

$A_2=\frac{200\times 28\times 28\times 28}{25\times 25}$

$A_2=\frac{8\times 28\times 28\times 28}{25}$

$A_2=7024.64$

Now,

Profit$=A_2-A_1$

$=7024.64-6655$

$=36964$/-

Profit$=$Rs. $369.64$/-

Hence, this is the answer.