Question 12

Suhani, an enterprising lady took the loan from M/s Koramattam Finance against her gold ornaments at a simple interest of 12% per annum for 2 years. She, then, loaned 50% of the amount received from M/s Koramattam Finance, to Vishamber at the rate of 16% per annum compounded half yearly for 2 years and the remaining amount to Kalawati at the rate of 12% per annum compounded annually for 2 years. What was the approximate percentage earning of Suhani at the end of 2 years ?

Solution

Let the original amount of money i.e. Principal taken by Suhani = 2P
The amount of money that she owes back to the loan company at the end of 2 years = 2P + 0.24*2P = 2.48P

Now, she loans amount P to Vishamber.
Amount returned by Vishamber to Suhani under given conditions = $$P\cdot\left(1.08\right)^4$$ = 1.36P

She loans amount P to Kalawati.
Amount returned by Kalawati to Suhani at end of 2 years under given conditions = $$P\cdot\left(1.12\right)^2=1.2544P$$

Amount received by Suhani at end of 2 years = 1.36P +1.2544P = 2.6144P
Earning of Suhani = 2.6144P - 2.48P = 0.1344P

As she paid 0.48P for this earning of 0.1344P.

The percentage earning can be calculated as (0.1344P/0.48P)*100 = 28%

Hence the answer is Option B 28%.


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