Correct Answer - Option 1 : 10%
Formulae Used:
Simple Interest (SI), on a Principal P for a time period of T years, at a rate of R% per annum, is:
SI = (P × R × T)/100
Amount received at Simple Interest = P + SI
Amount received on a principal at a rate of R% per annum for a time period of T, when compounded annually:
Amount = P × [1 + (R/100)]T
Calculation:
Let the money initially with A be Rs.x
So, the amount received by B after 1 year = x + [(x × 6 × 1)/100] = 1.06x
This amount becomes the principal for B
So, the amount collected with C after the second year is:
Amount = 1.06x × [1 + (10/100)]1 = 1.166x
So, when B collects this money back from C, the profit made by him is:
[(1.166x – 1.06x)/1.06x] × 100 = 10%
∴ The profit of B in the overall transaction is 10%