Answer: Rs 137.70
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Explanation:
6 months = 1/2 year = 0.5 year
1 year, 6 months = 1 yr + 0.5 yr = 1.5 years
Sunayana borrows Rs 12,500 at 12% annual interest for 1.5 years
The amount simple interest she must pay back is
i = p*r*t
i = 12500*0.12*1.5
i = 2,250
The amount of simple interest she must pay back is Rs 2,250 which is on top of the principal Rs 12,500
The total amount she must pay back is p+i = 12,500+2,250 = 14,750
Let x = 14,750 so we can use it later.
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She lends that Rs 12,500 to her friend and this amount is compounded half yearly, aka semiannually. So we'll use n = 2.
The amount Bishwant must pay back to her is
A = p*(1+r/n)^(n*t)
A = 12500*(1+0.12/2)^(2*1.5)
A = 14,887.70
Let y = 14,887.70 so we can use it later.
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Subtract the values of y and x to get the profit she makes
profit = revenue - costs
profit = y - x
profit = 14,887.70 - 14,750
profit = 137.70
The profit is Rs 137.70
