Rajesh took Rs. 38400 from Seema at 10% rate of Simple interest and give it to Suresh who gives 12.5% rate of compound interest compound annually. If Rajesh gives the money to Suresh for 3 years and return to Seema immediately. Find the profit of Rajesh.

Rajesh borrows Rs. 38400 at 10% simple interest for 3 years. Using SI = PRT/100, interest = 38400 * 10 * 3 / 100 = Rs. 11520. Total repayment to Seema = 38400 + 11520 = Rs. 49920. He lends the same amount at 12.5% compound interest annually for 3 years. Using A = P(1+r/100)^n, amount = 38400 * (1.125)^3 = 38400 * 1.4238 = Rs. 54975. Profit = 54975 - 49920 = Rs. 4755.