Given,
Loan amount taken by Ravi from Baker \(=\mathrm{P}_{1}=\) Rs. \(12500\)
Rate of interest for Ravi \(=\mathrm{R}_{1}=16 \%\)
Time taken by Ravi to repay his loan to Baker \(=\mathrm{t}_{1}=2\) years
Loan amount taken by Baker from Specter \(=\mathrm{P}_{2}=\) Rs. \(10000\)
Rate of interest for Baker \(=\mathrm{R}_{2}=12 \%\)
Time taken by Baker to repay his loan to Specter \(=\mathrm{t}_{2}=3\) years
We know, the formula of compound interest:-
\(\Rightarrow C I=\left[P\left\{\left(1+\frac{R}{100}\right)^{t}-1\right\}\right]\)
Where,
\(\mathrm{CI}=\) Compound interest
\(P=\) Principal
\(\mathrm{R}=\) Rate of interest
\(\mathrm{t}=\) Time period
Let, \(\mathrm{CI}_{1}\) and \(\mathrm{CI}_{2}\) be the compound interests paid by Ravi and Baker respectively.
Compound interest paid by Ravi to Baker:-
\(\Rightarrow \mathrm{CI}_{1}=\left[12500\left\{\left(1+\frac{16}{100}\right)^{2}-1\right\}\right] \)
\(=12500(1.3456-1)=\) Rs. 4,320\)
Compound interest paid by Baker to Specter:-
\(\Rightarrow \mathrm{CI}_{2}=\left[10000\left\{\left(1+\frac{12}{100}\right)^{3}-1\right\}\right]\)
\(=10000(1.40-1)=\) Rs. 4,049.28
Overall gain for Baker \(=\mathrm{CI}_{1}-\mathrm{CI}_{2}=4320-4049.28=\) Rs. 271
\(\therefore\) Overall gain for Baker \(=\) Rs. \(271\)