Multiple choice

Suresh borrows Rs. 10,000 for 2 years at 4 % p.a. simple interest. He lends it toRamesh at 6 % p.a. for 2 years. Find his gain in this transaction per year.

  1. Rs. 150

  2. Rs. 200

  3. Rs. 400

  4. Rs. 450

  5. Rs. 451
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Interest paid = 10000 * 0.04 * 2 = 800. Interest received = 10000 * 0.06 * 2 = 1200. Total gain = 400 over 2 years. Gain per year = 200.

AI explanation

Using the simple interest formula, the gain in interest per year is the difference between the two rates multiplied by the principal. The difference between the two annual interest rates is 6% minus 4%, which equals 2%. The annual gain is 2% of Rs. 10,000, which calculates to Rs. 200. Therefore, Suresh gains Rs. 200 per year in this transaction.

Keep practicing — related questions