Question
Rahul placed Rs. 40,000 between two investment options,
βEβ and βFβ, for 6 years and 3 years, respectively. Option βEβ accrues simple interest at 10% per annum, and option βFβ grows by compound interest (compounded annually) at 20% per annum. What amount was put into option βFβ if the interest from βEβ exceeds that from βFβ by Rs. 1,200?Solution
ATQ, Let the investment in option βFβ be Rs. βzβ. Investment in βEβ = Rs. (40000 - z). Simple interest from βEβ = (40000 - z) Γ 10% Γ 6. Compound interest from βFβ = z Γ [{1 + (20/100)}3 - 1]. Solving the equation for βzβ based on the interest difference, z = Rs. 15,000.
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