Question
The interest received by investing Rs. 4000 for 2 years
at compound interest of 20% p.a., compounded annually, was re-invested for 3 years at simple interest of 25% p.a. Find the simple interest received.Solution
Compound Interest received = 4000 × {1 + (20/100)}2 – 4000 = 4000 × (12/10)2 – 4000 = 5760 – 4000 = Rs. 1760 Simple interest received = 1760 × 3 × 25 ÷ 100 = Rs. 1320
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