Question

 A person borrows Rs. 7,000 for 3 years at 5% p.a. simple interest. He immediately lends it to another persons at \(6 \frac{1}{3}\%\) p.a for 3 years. Find his gain in the transaction per year.
1. Rs. 92`
2. Rs. 95.33
3. Rs. 93.33
4. Rs. 90

Answer 1

Correct Answer - Option 3 : Rs. 93.33

Given:

P₁ = 7000, T₁ = 3 year, R₁ = 5%

P₁ = 7000, T₂ = 3 year, R₂ = 6(1/3)%

Formula used:

Simple interest = (Principal amount × rate of interest × time)/100

Calculation:

S.I.₁ = (P₁ × R₁ × T₁)/100

⇒ (7000 × 3 × 5)/100

⇒ 1050

S.I. for one year = 1050/3

⇒ 350

S.I.₂ = (P₁ × R₂ × T₂)/10

⇒ [7000 × (19/3) × 3]/100

⇒ 1330

S.I.₂ for one year = 1330/3

⇒ 443.33

Gain for one year = 443.33 – 350

⇒ 93.33

∴ His gain in the transaction per year is 93.33