Question

Mr Tony took a loan of 120000 at 12%per annum compound interest to buy a piece of land. Find his profit if he later sold the land for 350000 without incurring any additional expenses

Answer 1

Profit is $335,600.

Step-by-step explanation:

To find Mr. Tony's profit, we need to calculate the compound interest on the loan and then subtract it from the selling price of the land.

First, we need to calculate the compound interest using the formula:

Compound Interest = Principal * (1 + Rate/100)^(Time in years)

Using the values given, the compound interest on the loan is:

Compound Interest = 120000 * (1 + 12/100)^(1)−120000

Simplifying this, we find that the compound interest is $14,400.

Next, we can find the profit by subtracting the compound interest from the selling price:

Profit = Selling Price - Compound Interest

Profit = 350000 - 14400 = $335,600.