Madhvan borrows Rs.9,000 for 3 yrs at 5% p.a simple interest. He immediately lends it to Roshan at 7 `(1)/(2)` %p.a for 3 yrs at simple interest. How much Madhavan gained in the transaction ?

1st transaction: Principal= Rs. 9,000, R= 5% p.a., T= 3 yrs. Simple Interest= (P×R×T)/100⇒(9000 × 5 × 3)/(100 )∴ S I = Rs. 1,350 2nd transaction: Principal= Rs. 9,000, R= 7.5% p.a., T= 3 yrs. Simple Interest= (P×R× T)/100⇒(9000 × 7.5 × 3)/(100 )∴ S I = Rs. 2,025 Gained in the transaction = Rs. 2,025 - Rs. 1,350 = Rs. 675 IxamBee Approach: As we know that Madhvan originally get (71/2% - 5%) = 21/2% p.a. for 3 years. He would get 5/(2 ) × 3 = 15/(2 ) % ∴ Profit he gained = 9,000 ×15/(2 )×1/100 = Rs. 675

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