Question
The interest earned on investing Rs. 8000 for 2 years at
the rate of 20% p.a., compounded annually, is used to purchase an article. If the article is later sold at 24% profit, then find the selling price of the article.Solution
Compound interest earned = 8000 × {1 + (20/100)}2 – 8000 = 11520– 8000 = Rs. 3520 So, selling price of the article = 3520 × 1.24 = Rs. 4364.8
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