Amit borrowed Rs 16000 at 15/2% simple interest .On the same day, he lent it to ashu at the same rate but compounded annually. What does he gain at the end of 2 years?

Explanation

To solve the problem step by step, we will calculate the simple interest that Amit has to pay back and the compound interest that he earns from Ashu. Finally, we will find out the gain Amit makes at the end of 2 years.

### Step 1: Calculate the Simple Interest Amit has to pay back
The formula for Simple Interest (SI) is given by:
\[ SI = \frac{P \times R \times T}{100} \]
Where:
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