Question
An amount of Rs. 2400 is placed in SIP 'P' at a 25% per
annum simple interest rate for 8 years, and Rs. 2500 is invested in SIP 'Q' with a 20% annual compound interest rate, compounded annually for 2 years. Determine the difference between the interest earnings from these two investments.Solution
ATQ, Interest received from SIP ‘P’ = (2400 × 25 × 8)/100 = Rs. 4800 Interest received from SIP ‘Q’ = 2500(1 + 20/100)2 – 2500 = Rs. 1100 Required difference = 4800 – 1100 = Rs. 3700
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