Question
Vishu invested Rs. 4000 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 Vishu at the end of 5 years.Solution
Amount received by Vishu after 3 years of investment = (4000 × 20 × 3)/100 + 4000 = Rs. 6400 Therefore, sum invested by Vishu at compound interest = Rs. 6400 Amount received by Vishu at the end of 5 years = 6400(1 + 0.2)2 = Rs. 9216
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