Answered

A merchant borrowed 4,000 at 6% per annum on
simple interest and lent this sum to another person at
7% per annum on compound interest. If the transaction
continued for two years, what was the merchant's gain?
​

Answer :

Answer:

614.376 rupees profit

Step-by-step explanation:

merchant borrowed 4000 × 6/100 = 4240

compound interest= A = p(1+ r/100)^2n

in which A - amount

p - principle amount

r - rate of interest

n - no.of years

which is 4854.376 rupees is compound interest

4854.376 - 4240 = 614.376 rupees

is the profit in two years.

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