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      Question

      Rs. P invested at R% p.a. gives simple interest and

      compound interest (compounded annually) of Rs. 750 and Rs. 900 respectively at the end of 2 years. Find the compound interest (compounded annually) earned if Rs. (P + 350) is invested at (R + 8)% p.a. for 2 years.
      A Rs. 2221.75 Correct Answer Incorrect Answer
      B Rs. 1122 Correct Answer Incorrect Answer
      C Rs. 1532.64 Correct Answer Incorrect Answer
      D Rs. 1980.3 Correct Answer Incorrect Answer
      E None of these Correct Answer Incorrect Answer

      Solution

      Simple interest for one year = 750/2 = Rs. 375
      Difference between compound interest and simple interest for 2 years = 900 – 750 = Rs. 150
      So, R = 150/375 × 100 = 40%
      And, P = 375/0.40 = Rs. 937.5
      Desired interest= [(1.48)2 – 1] × 937.5 = Rs. 1532.64

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