The Amount earned on sum of Rs.3,000 in 8months at rate of 20% per annum. If the same amount was given as a loan at rate halved what will be the amount gained in 5 years?
Question
The Amount earned on sum of Rs.3,000 in 8months at rate of 20% per annum. If the same amount was given as a loan at rate halved what will be the amount gained in 5 years?
Solution
First, let's calculate the amount earned on a sum of Rs.3,000 in 8 months at a rate of 20% per annum.
Step 1: Convert the rate of interest from annual to monthly. Since there are 12 months in a year, the monthly interest rate is 20% / 12 = 1.67%.
Step 2: Calculate the interest for 8 months. The formula for simple interest is (Principal * Rate * Time) / 100. So, the interest earned is (3000 * 1.67 * 8) / 100 = Rs.400.
Now, let's calculate the amount gained if the same amount was given as a loan at a rate halved for 5 years.
Step 1: Halve the annual interest rate. The new rate is 20% / 2 = 10%.
Step 2: Calculate the interest for 5 years. Using the same formula for simple interest, the interest earned is (3000 * 10 * 5) / 100 = Rs.1500.
So, the amount gained in 5 years when the interest rate is halved is Rs.1500.
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