B borrows money from A at 6% p.a. simple interest, for the first year,

1.	B borrows money from A at 6% p.a. simple interest, for the first year, and lends it to C at compound interest of 10% p.a, for the second year. If B collects the money back from C after the completion of the second year, then what is the percentage profit for B in the overall transaction?1. 10%2. 5%3. 4%4. 8%
Answer» Correct Answer - Option 1 : 10% Formulae Used: Simple Interest (SI), on a Principal P for a time period of T years, at a rate of R% per annum, is: SI = (P × R × T)/100 Amount received at Simple Interest = P + SI Amount received on a principal at a rate of R% per annum for a time period of T, when compounded annually: Amount = P × [1 + (R/100)]^T Calculation: Let the money initially with A be Rs.x So, the amount received by B after 1 year = x + [(x × 6 × 1)/100] = 1.06x This amount becomes the principal for B So, the amount collected with C after the second year is: Amount = 1.06x × [1 + (10/100)]¹ = 1.166x So, when B collects this money back from C, the profit made by him is: [(1.166x – 1.06x)/1.06x] × 100 = 10% ∴ The profit of B in the overall transaction is 10%

B borrows money from A at 6% p.a. simple interest, for the first year, and lends it to C at compound interest of 10% p.a, for the second year. If B collects the money back from C after the completion of the second year, then what is the percentage profit for B in the overall transaction?1. 10%2. 5%3. 4%4. 8%

Answer» Correct Answer - Option 1 : 10%

Formulae Used:

Simple Interest (SI), on a Principal P for a time period of T years, at a rate of R% per annum, is:

SI = (P × R × T)/100

Amount received at Simple Interest = P + SI

Amount received on a principal at a rate of R% per annum for a time period of T, when compounded annually:

Amount = P × [1 + (R/100)]^T

Calculation:

Let the money initially with A be Rs.x

So, the amount received by B after 1 year = x + [(x × 6 × 1)/100] = 1.06x

This amount becomes the principal for B

So, the amount collected with C after the second year is:

Amount = 1.06x × [1 + (10/100)]¹ = 1.166x

So, when B collects this money back from C, the profit made by him is:

[(1.166x – 1.06x)/1.06x] × 100 = 10%

∴ The profit of B in the overall transaction is 10%