abhay borrowed Rs 16000 at 15/2 % per annum simple interest. On the same day , he lent it to Gurmeet at the same rate but compounded annually. What does he gain at the end of 2 years?
Principal amount; P = Rs.16000
Rate of interest; R = % p.a.
Time; T = 2 years
So S.I. = = Rs.2400
So, total amount Abhay has to pay = Rs.16000 + Rs.2400 = Rs.18400
Considering the given sum when it is compounded annually;
So, Amount accumulated at the end of 2 years =
This means Amount received by Abhay from Gurmeet = Rs.18490
Therefore net gain by Abhay = Rs.18490 - Rs.18400 = Rs.90