Multiple choice

A person borrowed Rs 5,500 from a money lender at the rate of 24% per annum simple interest. He lent this amount to his friend at the rate of 36% per annum simple interest. After two years he collected the amount due to the money lender. The amount he thus earned is

  1. Rs 1,250

  2. Rs 1,300

  3. Rs 1,320

  4. Rs 1,350
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest earned = (36% - 24%) of 5500 for 2 years. 12% of 5500 = 660 per year. For 2 years, 660 * 2 = 1320.

AI explanation

The interest paid to the money lender for two years is (5500 * 24 * 2) / 100 = Rs 2,640. The interest received from the friend for the same period is (5500 * 36 * 2) / 100 = Rs 3,960. The amount earned is the difference between the interest received and paid: 3960 - 2640 = Rs 1,320.

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