Question
A man invested a certain amount of sum at 12.5% per
annum simple interest and earned an interest of Rs.2000 after 4 years. If the same amount is invested at 20% per annum compound interest, compounded annually for two years, then find the interest.Solution
Let the certain sum of money be Rs.P. So, P x 0.125 x 4 = 2000 => P = Rs.4000 Desired interest = [(1.2)2 – 1] x 4000 = Rs.1760
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