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      Question

      Rs. 16000 invested for 2 years in a scheme offering

      compound interest (compounded annually) of 15% p.a. gives an interest that is Rs. 25 less than the interest received on investing Rs. Y for a year at simple interest of 25% p.a.. Find the value of โ€˜Yโ€™.
      A 20040 Correct Answer Incorrect Answer
      B 22740 Correct Answer Incorrect Answer
      C 20740 Correct Answer Incorrect Answer
      D 23740 Correct Answer Incorrect Answer
      E None of these Correct Answer Incorrect Answer

      Solution

      Interest returned on investing Rs. 16000 = 16000(1 + 15/100)2ย โ€“ 16000 = 16000(115/100)2ย โ€“ 16000 = 16000(23/20)2ย โ€“ 16000 = 16000{232/202)- 1} = 16000{529/400)- 1} = 16000(529 - 400)/400 = Rs. 5160 So, interest returned on investing Rs. Y for 1 year at simple interest of 25% p.a. = 5160ย + 25 = Rs. 5185 Or, Y ร— (25/100) = 5185 Or, Y = 5185 ร— (100/25) Or, Y = 20740

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