Question
Veeru invested Rs. 3950 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 Veeru at the end of 5 years.Solution
Amount received by Veeru after 3 years of investment = (3950 × 20 × 3)/100 + 3950 = Rs. 6320 Therefore, sum invested by Veeru at compound interest = Rs. 6320 Amount received by Veeru at the end of 5 years = 6320(1 + 0.2)2 = Rs. 9100.8
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