Question
Rahul invested a certain amount at a simple interest
rate of 8% per annum, and after 6 years, it grew to Rs. 1,850. If he had instead invested the same sum at a compound interest rate of 20% per annum for 2 years, what would be the total amount he would have after those 2 years?Solution
ATQ, Simple interest = (sum × rate of interest × time period in year) ÷ 100 Let the sum invested be Rs. 'S' So, 1850 - S = (S × 8 × 6) ÷ 100 Or, 1850 - S = 0.48S Or, 1850 = 1.48S So, S = 1250 Amount received from second investment = Sum × {1 + (rate/100)}Time period So, required amount = 1250 × {1 + (20/100)}2 = 1.44 × 1250 = Rs. 1,800
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