Multiple choice

Mr. Khanna pays 10% pa interest on an amount borrowed and lends this amount at 12% pa. If at the end of the year, he earns Rs. 2.4 crore as simple interest in the transaction, then what is the sum transacted?

  1. Rs. 480 crore

  2. Rs. 240 crore

  3. Rs. 120 crore

  4. Rs. 60 crore
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Net interest earned = 12% - 10% = 2% per annum. 2% of Sum = 2.4 crore. Sum = 2.4 / 0.02 = 120 crore.

AI explanation

Mr. Khanna earns the difference between the lending rate and the borrowing rate, which is a net gain of 12 percent minus 10 percent, resulting in 2 percent. The simple interest earned is Rs. 2.4 crore, which equals 2 percent of the principal sum. Solving for the principal gives 2.4 crore multiplied by 100 divided by 2, resulting in Rs. 120 crore.

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