Question
Avinash borrowed
from his friend Gaurav at the rate of
per annum simple interest for 3 years,
He lent this money to Vivek at the same rate but compounded annually. Find hais gafter 3 years.
Kamala borrowed
from a Bank to buy a scooter at a rate of
p.a. compounded yearly. What
He lent this money to Vivek at the same rate but compounded annually. Find hais gafter 3 years.
Kamala borrowed
Ask by O'Quinn Sherman. in India
Jan 11,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
Avinash borrows ₹32,000 at 8% simple interest for 3 years, paying ₹7,680 in interest, totaling ₹39,680. He lends the same amount to Vivek at 8% compound interest annually, earning approximately ₹8,310.78 after 3 years. His net gain is ₹630.78.
Kamala borrowed ₹36,400 at 15% compounded yearly, but the time period and specific details are missing. Please provide complete information for a full solution.
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To calculate Avinash’s gain after 3 years, we first find the total amount Vivek has to pay back after borrowing the
at
compounded annually. Using the formula for compound interest
where
,
,
, and
, we find:
Avinash initially borrowed
, so his gain after 3 years is:
For Kamala’s scooter loan of
at
compounded yearly, we also use the compound interest formula. Here,
,
, and
(for a single year):
Therefore, after 3 years, if the loan is calculated yearly, it grows substantially, and she would owe more each year instead of a flat interest. Staying savvy about how compound interest works can really save you from shocking surprises!