Karina borrowed ₹ 50,000 from Karishma at simple interest of per annum for 2 years and Ankur lent the same amount to Vidya on the same day at per annum for 2 years and Ankur lent the same amount to Vidya on the same day at per annum compound interest for 2 years. Find Ankur's gain after 2 years .

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₹. 720

₹. 820

₹. 920

₹. 620

answer is A.

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Detailed Solution

Concept- To find the difference of Ankur's gain on ₹ 50,000 for 2 years we first calculate simple interest on a given amount and then we find compound interest on the same amount. Then we find the difference of the amount obtained to get the required solution of the problem.
Formals used: Simple Interest (S.I.)

, where

is the principle or amount borrowed,

is the rate and

is the time for which amount is borrowed.
Amount in case of compound interest (C.I.) Question Image

, where

is the principle or amount borrowed,

is the rate and

is the time for which amount is borrowed.
Karina borrowed ₹ 50,000 from Karishma at simple interest.
Therefore, Principle

years
Simple interest (S.I)

Substituting values of P, R and

in the above simple interest formula. We have,
Simple interest

Simple interest (S.l)

Therefore, we see that Simple interest on the amount ₹ 50,000 is ₹ .12,000.
Now, find the amount for the same principle but it is a compound interest.

and

years
Amount Question Image

Substituting values of P, R and

in above formula to obtain value of Amount.

Amount

So, for finding compound interest we have to find the difference between the amount and principle.

C.I = Amount - Principle

C.I

From above we see that difference of compound interest (C.I.) and simple interest (S.l.) is ₹ 12,720 - ₹.12,000
=₹.720
So, Ankur's gain is ₹. 720 that is more than Karishma .
Hence, the correct answer is option 1.

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