Question

Amar borrowed Rs. 2000 at 30% per annum simple interest and then immediately lent in at 30% per annum compound interest. Find his gain at the end of two year?
1. Rs.170
2. Rs.180
3. Rs.200
4. Rs.150

Answer 1

Correct Answer - Option 2 : Rs.180

Given:

Amar borrowed 2000 Rs. at 30% per annum simple interest and then immediately lent in at 30% per annum compound interest

Formula used:

SI = \(\dfrac{P \times R \times T}{100}\)

Amount = P(1 + \(\dfrac{R}{100}\))^T

P = principal

R = rate of interest

T = time period

Calculation:

SI on 2000 at 30% per annum = \(\dfrac{2000 \times 30 \times 2}{100}\) = 1200

CI on 2000 at 30% per annum for 2 years = Amount - Principal

⇒ CI = 2000(1 + \(\dfrac{30}{100}\))² - 2000

⇒ CI = 2000[(169/100) - 1]

⇒ CI = 2000(69/100)

⇒ CI = 1380

CI - SI = 1380 - 1200 = 180

∴ His gain = Rs. 180