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    Question

    A man invested a certain amount of sum at 12.5% per

    annum simple interest and earned an interest of Rs.2500 after 2 years. If the same amount is invested at 20% per annum compound interest, compounded annually for two years, then find the interest.
    A Rs.1470 Correct Answer Incorrect Answer
    B Rs.3168 Correct Answer Incorrect Answer
    C Rs.1008 Correct Answer Incorrect Answer
    D Rs.4400 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Let the certain sum of money be Rs.P. So,  P x 0.125 x 2 = 2500 => P = Rs.10000 Desired interest = [(1.2)2 – 1] x 10000 = Rs.4400

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