Question
The compound interest earned on an investment of Rs. 'Y'
over 2 years at an annual compound interest rate of 12%, compounded yearly, amounts to Rs. 1,272. Determine the interest earned on an investment of Rs. 12,800 over 3 years at a simple interest rate of 15% per annum.Solution
Compound interest earned on investing Rs. ‘Y’ = Y × {1 + (12/100)² } – Y So, Y × {1 + (12/100)² } – Y = 1272 Or, 1.2544Y = 1272 + Y Or, 0.2544Y = 1272 So, Y = 1272 ÷ 0.2544 = 5000 Simple interest earned on investing Rs. 12,800 = 12800 × 3 × 15 ÷ 100 = Rs. 5,760 = 5500 + 260 = (1.1Y + 260)
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