An equal sum of money is invested in two schemes which

Solution

ATQ, Let the sum invested in two schemes be Rs. 'P'. Let the rate of interest be 'r%', per annum. We know that, simple interest received at the end of each year of investment is equal. Simple interest received at the end of first year = Simple interest received at the end of second year = (1200/2) = Rs. 600 Also, simple interest and compound interest received at the end of first year are equal. So, simple interest received at the end of first year = Compound interest received at the end of first year = Rs. 600 Compound interest received in the second year = 1320 - 600 = Rs. 720 So, we can say that a sum of Rs. 600 amounts to Rs. 720 at the end of a year at the given rate of interest. Compound interest received for 1 year = Simple interest received for 1 year Simple interest = Principal X (Rate/100) X Time 600 X (r/100) X 1 = 720 - 600 So, r = 120 X (5/6) = 10 Therefore, rate of interest = r = 20%