A person gives a loan of 50,000 at a rate of 8% per annum simple interest for 2 years

A person gives a loan of 50,000 at a rate of 8% per annum simple interest for 2 years and another Rs. 50,000 at the same rate compounded annually for 2 years. After 2 years the difference in the amount he gets back is

  1. 300
  2. 320
  3. 360
  4. 380
Anurag Mishra Professor Asked on 19th April 2016 in Maths.
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  • 1 Answer(s)

    Answer: (2) 320

    Solution:-
    Principal = Rs.50,000, Rate of Interest = 8%, Time = 2years

    Then, Simple Interest = 50,000 x 8 x 2/100
    = 500 x 16
    = 8,000

    Compound Interest = 50,000 x (8/100 + 1)2 – 50,000
    = 50,000(2/25 +1)2 – 50,000
    = 50,000 x 27 x 27/25 x 25 – 50,000
    = 58,320 – 50,000
    = 8,320

    Then, the difference of amount he gets back = 8,320 – 8,000
    = 320

    Hence, the correct answer is option (2) 320.

    Anurag Mishra Professor Answered on 20th April 2016.
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