Question
A sum of money invested for 2 years at 20% compounded
annually and similar money invested for 3 years on simple interest at 10% per annum. If the difference between interests is Rs. 280, then find the sum of money.Solution
Effective rate of interest for CI = x + y + (xy/100) = 20 + 20 + (20 × 20)/100 = 44% Effective rate of interest for SI = 3 × 10 = 30% Difference in rates = 44 - 30 = 14% Let sum be S. Hence, 14% of S = 280 ⇒  S × (14/100) = 280 ⇒  S = 2,000
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