Purnima took a loan of Rs.100000 from Nepal investment bank at the rat...
Loan details:
Principal amount (P) = Rs.100000
Rate of interest (R) = 10%
Time period (T) = 2 years
Calculation of compound interest:
Compound interest (CI) can be calculated using the formula:
CI = P * (1 + R/100)^T - P
Substituting the given values:
CI = 100000 * (1 + 10/100)^2 - 100000
= 100000 * (1 + 0.1)^2 - 100000
= 100000 * 1.1^2 - 100000
= 100000 * 1.21 - 100000
= 121000 - 100000
= 21000
Therefore, the compound interest on the loan is Rs.21000.
Lending details:
Purnima lent the entire amount of Rs.100000 to her friends.
Calculation of profit:
Profit can be calculated using the formula:
Profit = CI - P
Substituting the given values:
Profit = 21000 - 100000
= -79000
Therefore, Purnima will incur a loss of Rs.79000.
Explanation:
Purnima took a loan of Rs.100000 from Nepal Investment Bank at a rate of 10% compound interest. This means that she will have to pay back the loan amount along with the interest at the end of the time period. The compound interest on the loan is calculated using the formula CI = P * (1 + R/100)^T - P, where P is the principal amount, R is the rate of interest, and T is the time period. Substituting the given values, we find that the compound interest on the loan is Rs.21000.
Immediately, Purnima lent the entire amount of Rs.100000 to her friends at a rate of 10% compound interest compounded half-yearly. This means that her friends will have to pay back the loan amount along with the interest at the end of the time period. However, since the interest is compounded half-yearly, the total interest earned will be higher than simple interest.
To calculate the profit, we subtract the principal amount from the compound interest. In this case, the profit is negative, indicating a loss of Rs.79000. This means that Purnima will incur a loss of Rs.79000 at the end of 2 years.
Therefore, Purnima will make a loss of Rs.79000 at the end of 2 years.
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