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    Question

    Rahul placed Rs. 40,000 between two investment options,

    β€˜E’ and β€˜F’, for 6 years and 3 years, respectively. Option β€˜E’ accrues simple interest at 10% per annum, and option β€˜F’ grows by compound interest (compounded annually) at 20% per annum. What amount was put into option β€˜F’ if the interest from β€˜E’ exceeds that from β€˜F’ by Rs. 1,200?
    A Rs.18,000 Correct Answer Incorrect Answer
    B Rs.15,000 Correct Answer Incorrect Answer
    C Rs.25,000 Correct Answer Incorrect Answer
    D Rs.20,000 Correct Answer Incorrect Answer
    E none of these Correct Answer Incorrect Answer

    Solution

    ATQ, Let the investment in option β€˜F’ be Rs. β€˜z’. Investment in β€˜E’ = Rs. (40000 - z). Simple interest from β€˜E’ = (40000 - z) Γ— 10% Γ— 6. Compound interest from β€˜F’ = z Γ— [{1 + (20/100)}3 - 1]. Solving the equation for β€˜z’ based on the interest difference, z = Rs. 15,000.

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