Vibhor borrows Rs 65,000 at 10% per annum simple interest for 3 years and lends it at 10% per annum compound interest for 3 years. Find his gain after three year.
- S.I. on Rs 65000 @ 10% for years = 65000 x 10 x 3 = Rs 19500 100 C.I. on Rs 65000 @ 10% for 3 years = 65000 ( 1+ 10 100 ) 3 - 65000 = 65000 11 x 11 x 11 -10 x 10 x 10 1000
• Simple Interest: Interest calculated only on the principal amount or the initial sum of money borrowed or invested. It is calculated as the product of the principal amount, the interest rate and the time period.
Formula: SI = (P x R x T)/100
Where,
P = Principal amount
R = Rate of interest
T = Time period
• Compound Interest: Interest calculated on the principal amount and the interest generated in the previous periods. It is calculated as the sum of principal amount and interest on the principal amount for the specified period of time.
Formula: CI = P (1 + R/100)^T - P
Where,
P = Principal amount
R = Rate of interest
T = Time period
• In the given question, Vibhor borrows Rs 65,000 at 10% per annum simple interest for 3 years and lends it at 10% per annum compound interest for 3 years.
• The simple interest earned by Vibhor in 3 years = (65000 x 10 x 3)/100
= Rs 19,500
• The compound interest earned by Vibhor in 3 years = 65000 (1 + 10/100)^3 - 65000
= Rs 2015
• Thus, Vibhor’s gain after 3 years is Rs 2015.
Hence, the correct answer is Option D - 2015.
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