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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.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.

A Rs.1512 Correct Answer Incorrect Answer
B Rs.2816 Correct Answer Incorrect Answer
C Rs.2464 Correct Answer Incorrect Answer
D Rs.1760 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 4 = 2000 => P = Rs.4000 Desired interest = [(1.2)2 – 1] x 4000 = Rs.1760

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