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      Question

      The interest earned when a sum is invested at simple

      interest of 25% p.a., for 3 years, is Rs. 1875. What will be the total amount received after 2 years on investing the same sum at compound interest (compounded annually) of 14% interest p.a.?
      A Rs. 3249 Correct Answer Incorrect Answer
      B Rs. 3209 Correct Answer Incorrect Answer
      C Rs. 3250 Correct Answer Incorrect Answer
      D Rs. 3549 Correct Answer Incorrect Answer

      Solution

      Let the sum invested = Rs. Y According to the question, (Y × 3 × 25) ÷ 100 = 1875 So, Y = (1875/0.75) = 2500 So, required amount received = 2500(1 + 14/100)2 = 2500(114/100)2 = Rs. 3249

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