Question
The interest earned when a sum is invested at simple
interest of 20% p.a., for 3 years, is Rs. 3000. What will be the total amount received after 2 years on investing the same sum at compound interest (compounded annually) of 10% interest p.a.?Solution
Let the sum invested = Rs. Y According to the question, (Y × 3 × 20) ÷ 100 = 3000 So, Y = (3000/0.6) = 5000 So, required amount received = 5000(1 + 10/100)2 = 5000(11/10)2 = Rs. 6050
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