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    Question

    Quantity I: Ravi invested Rs. 35,200 in a plan offering

    compound interest at an annual rate of 12.5%. Calculate the compound interest earned by Ravi after 3 years of investment. Quantity II: Mukul invested Rs. P at a compound interest rate of 18% per annum for 2 years and earned a total interest of Rs. 8,829. If Mukul invests Rs. (P + 4,800) for an additional 2 years at an interest rate of 25%, what will be the compound interest on this new investment?
    A Quantity I ≤ Quantity II Correct Answer Incorrect Answer
    B Quantity I ≥ Quantity II Correct Answer Incorrect Answer
    C Quantity I > Quantity II Correct Answer Incorrect Answer
    D Quantity I < Quantity II Correct Answer Incorrect Answer
    E Quantity I = Quantity II Correct Answer Incorrect Answer

    Solution

    Answer: D Quantity I: Amount of money invested by Ravi = Rs. 35,200 Rare of interest compounded = 12.5% Time for investment = 3 years So, the amount of money after 3 years will be, = 35,200 × (1 + 12.5/100)³ = 35,200 × (112.5/100)³ = 35,200 × 112.5/100 × 112.5/100 × 112.5/100 = Rs. 50,118.75 Thus, the amount of interest received by Ravi is, = 50,118.75 –35,200 =>Rs. 14,918.75 Hence, the required answer is = Rs. 14,918.75. Quantity II: Mukul gets an compound interest of = Rs. 8829 Then, according to the question, = 8829 = P [(1 + 18/100)² - 1] = 981P = 8829 × 2500 = P = Rs. 22,500 Now, the total amount of investment is = 22,500 + 4800 =>Rs. 27,300 Then, according to the question, = 27,300 × [(1 + 25/100)² - 1] = 27,300 × 9/16 =>Rs. 15,356.25 Hence, the required answer is = Rs. 15,356.25. Hence, Quantity I < Quantity II.

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