Question
Virendra invested Rs. 2600 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 Virendra at the end of 5 years.Solution
Amount received by Virendra after 3 years of investment = (2600 × 20 × 3)/100 + 2600 = Rs. 4160 Therefore, sum invested by Virendra at compound interest = Rs. 4160 Amount received by Virendra at the end of 5 years = 4160(1 + 0.2)2 = Rs. 5990.4
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