A person borrows ₹7,000 for 3 years at 5% p.a. simple interest. He immediately lands it to another person at $6\frac{1}{3}$% p.a for 3 years. Find his gain in the transaction per year.
Answer & explanation
Correct answer: option 2
We know ,
Simple Interest = \(\frac{Principal ×Rate × Time }{100}\)
Total Gain transaction = \(\frac{7000 ×19 × 3 }{100}\) - \(\frac{7000 ×3 × 5 }{100 × 3}\)
= 1330 - 1050
= 280
Gain transaction per year = \(\frac{280 }{3}\) = 93.33