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    Question

    A man invested a certain amount of sum at 12.5%

    per annum simple interest and earned an interest of Rs 3000 after 3 years. If the same amount is invested at 20% per annum compound interest, compounded annually for two years then the interest would be:
    A Rs. 4625 Correct Answer Incorrect Answer
    B Rs. 3450 Correct Answer Incorrect Answer
    C Rs. 1344 Correct Answer Incorrect Answer
    D Rs. 3520 Correct Answer Incorrect Answer
    E Rs. 3375 Correct Answer Incorrect Answer

    Solution

    Let the certain sum of money be Rs. P
    So, P × 0.125 × 3 = 3000
    So, P = Rs. 8000
    Desired interest = [(1.20)2 – 1] × 8000 = Rs. 3520

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