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Question:

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?

Explanation:

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 ∙ (1.08)⁴ = 1.36P
She loans amount P to Kalawati.
Amount returned by Kalawati to Suhani at end of 2 years under given conditions = P ∙ (1.12)² = 1.2544P
Amount received by Suhani at end of 2 years = 1.36P +1.2544P = 2.8544P
Earning of Suhani = 2.8544P - 2.48P = 0.3744P

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