A man takes a loan at 5% simple interest for a period of 2 years. He immediately gives this money on loan at 5% compound interest for 2 years. What is the amount of loan he has taken if he makes a profit of ₹ 2,100 ?
[amp_mcq option1=”₹ 8,00,000″ option2=”₹ 4,20,000″ option3=”₹ 1,00,000″ option4=”₹ 8,40,000″ correct=”option4″]
This question was previously asked in
UPSC CISF-AC-EXE – 2023
– Compound Interest formula: CI = Amount – Principal = P(1 + R/100)^T – P.
– The profit in this scenario is the difference between the interest earned (CI) and the interest paid (SI).
– Set up an equation with the profit difference equal to the given profit amount and solve for the principal P.