Question
Vimal invested Rs. 3250 at 20% p.a. simple interest for
3 years. After 3 years, he invested the amount received by him at the 20% p.a. compound interest, compounded annually for another 2 years. Find the final amount received by Vimal at the end of 5 years.Solution
Amount received by Vimal after 3 years of investment = (3250 × 20 × 3)/100 + 3250 = Rs. 5200 Therefore, sum invested by Vimal at compound interest = Rs. 5200 Amount received by Vimal at the end of 5 years = 5200(1 + 0.2)2 = Rs. 7488
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