Question
Download Solution PDFA person borrows Rs. 66000 at the rate of 10 percent per annum on simple interest for 4 years. He immediately lends it to another person at the rate of 12.5 percent per annum on simple interest for 4 years. What is the value of gain per year?
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFGiven:
Principal (P) borrowed = ₹66,000
Rate (r1) borrowed = 10% per annum
Time (t) borrowed = 4 years
Principal (P) lent = ₹66,000
Rate (r2) lent = 12.5% per annum
Time (t) lent = 4 years
Formula used:
Simple Interest (SI) = P × r × t / 100
Gain per year = (SIlent - SIborrowed) / t
Calculation:
SIborrowed = 66,000 × 10 × 4 / 100
⇒ SIborrowed = ₹26,400
SIlent = 66,000 × 12.5 × 4 / 100
⇒ SIlent = ₹33,000
Gain per year = (33,000 - 26,400) / 4
⇒ Gain per year = ₹6,600 / 4
⇒ Gain per year = ₹1,650
∴ The correct answer is option 3.
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