Question : A person borrows Rs. 20000 at the rate of 6% per annum on simple interest for 3 years. He immediately lends it to another person at the rate of 8.5% per annum on simple interest for 3 years. What is the value of gain per year?
Option 1: Rs. 1500
Option 2: Rs. 500
Option 3: Rs. 800
Option 4: Rs. 200
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Correct Answer: Rs. 500
Solution :
Given,
A person borrows Rs. 20000 for 3 years at 6% per annum Simple Interest.
He immediately lends it to another person at 8.5% per annum for 3 years.
P = Rs. 20000 and time, $T$ = 1 year [As we need per year profit]
First rate, $R_2$ = 6% and Second rate, $R_1$ = 8.5%
We know,
Simple Interest $=\frac{\text{P}(\text{R}{_1}-\text{R}{_2})T}{100}=\frac{20000 × (8.5 - 6) × 1}{100}=\frac{20000 × 2.5 × 1}{100}=500$
Hence, the correct answer is Rs. 500.
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