A dishonest lender claims to lend money on simple interest, but he does the calculation of principal by including interest of every six months. If he lends money at the rate of 12%, then by what amount would he be dishonest with on an amount of 5600 in 1 year?

The lender calculates principal every 6 months instead of annually. For 5600 at 12% for 1 year: First 6 months interest = 5600 x 12% x 6/12 = 336. New principal = 5600 + 336 = 5936. Next 6 months interest = 5936 x 12% x 6/12 = 356.16. Actual simple interest should be 5600 x 12% x 1 = 672. Dishonest amount = 356.16 + 336 - 672 = 20.16.