Question
Gaurav borrowed Rs. 40000 from a bank at the simple
interest of 10% p.a for 2 years. He lent some of this borrowed amount to his friend Shubham at the compound interest of 20% p.a for same period of time. If Gaurav earned Rs. 3000 from whole of this transaction, then find the amount lent to Shubham.Solution
Interest to be paid to bank in 2 years: 10% × 2 × 40000 => 8000 Let the amount lent by Gaurav to Shubham be “A” Compound interest received by Gaurav in 2 years: A(1+20/100)2 – A => 11A/25 Net amount earned by Gaurav: 11A/25 – 8000 = 3000 => A = 25000
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