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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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