# Smita took a loan of Rs. 75,000 at a simple interest rate of 15% per annum. She lent that amount to his friend on the same day at the same rate of int

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Smita took a loan of Rs. 75,000 at a simple interest rate of 15% per annum. She lent that amount to his friend on the same day at the same rate of interest but compounded annually. How much profit will she make after 2 years?
1. Rs. 1,887.5
2. Rs. 1,867.5
3. Rs. 1,786.5
4. Rs. 1,687.5

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Correct Answer - Option 4 : Rs. 1,687.5

Given:

P = Rs. 75,000

Rate = 15%

Time = 2 years

Formula used:

SI = (P × R × T)/100

CI = Amount –  Principal

Amount = P(1 + R/100)t

Calculation:

According to the question

SI = (75,000 × 15 × 2)/100

⇒ Rs. 22,500

Now,

Amount = 75,000 × (1 + 15/100)2

⇒ Rs. (75,000 × 115/100 × 115/100)

⇒ Rs. 99,187.5

CI = Amount – Principal

⇒ (99.187.5 – 75,000)

⇒ Rs. 24,187.5

Now,

Required profit will she make = Rs. (24,187.5 – 22,500)

⇒ Rs. 1,687.5

∴ Require profit Smita will make is Rs. 1,687.5