Question
Rs. 5500 is invested in scheme ‘A’ for a year at
simple interest of 30% p.a. The interest received from scheme ‘A’ is reinvested for 2 years in scheme ‘B’ which offers compound interest (compounded annually) of 30% p.a. What is the total amount received from scheme ‘B’?Solution
Interest received from scheme ‘A’ = 5500 × (30/100) = Rs. 1650 Amount received from scheme ‘B’ = 1650 × {1 + (30/100)2} = 1.69 × 1650 = Rs. 2788.5
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