Question
The interest received by investing Rs. 2900 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 = 2900 × {1 + (20/100)}2 – 2900 = 2900 × (12/10)2 – 2900 = 4176 – 2900 = Rs. 1276 Simple interest received = 1276 × 3 × 25 ÷ 100 = Rs. 957
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