Question
A man invested a certain amount of sum at 12.5% per
annum simple interest and earned an interest of Rs.1800 after 2 years. If the same amount is invested at 20% per annum compound interest, compounded annually for two years, then find the interest.Solution
Let the certain sum of money be Rs.P. So, P x 0.125 x 2 = 1800 => P = Rs.7200 Desired interest = [(1.2)2 – 1] x 7200 = Rs.3168
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