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Question

A man invested a certain amount of sum at 5% per annum simple interest and earned an interest of Rs. 2500 after 5 years. If the same amount is invested at 15% per annum compound interest, compounded annually for two years then the interest would be:

A Rs. 3168 Correct Answer Incorrect Answer
B Rs. 3225 Correct Answer Incorrect Answer
C Rs. 3368 Correct Answer Incorrect Answer
D Rs. 3468 Correct Answer Incorrect Answer
E Rs. 3568 Correct Answer Incorrect Answer

Solution

Let the certain sum of money be Rs. P
So, P × 0.05 × 5 = 2500
So, P = Rs. 10000
Desired interest = [(1.15)2 – 1] × 10000 = Rs. 3225

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