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      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.
      A Rs.3752 Correct Answer Incorrect Answer
      B Rs.1700 Correct Answer Incorrect Answer
      C Rs.3700 Correct Answer Incorrect Answer
      D Rs.3000 Correct Answer Incorrect Answer
      E none of these Correct Answer Incorrect Answer

      Solution

      ATQ, Interest received from SIP β€˜P’ = (2400 Γ— 25 Γ— 8)/100 = Rs. 4800 Interest received from SIP β€˜Q’ = 2500(1 + 20/100)2 – 2500 = Rs. 1100 Required difference = 4800 – 1100 = Rs. 3700

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