Question
The interest received by investing Rs. 1000 for 2 years
at compound interest of 20% p.a., compounded annually, was re-invested for 4 years at simple interest of 20% p.a. Find the simple interest received.Solution
Compound Interest received = 1000 × {1 + (20/100)}2 – 1000 = 1000 × (12/10)2 – 1000 = 1440 – 1000 = Rs. 440 Simple interest received = 440 × 4 × 20 ÷ 100 = Rs. 352
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