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    Question

    Rahul secures a loan amounting to Rs. 8,800 from a bank,

    which charges an annual simple interest rate of 20%. He then allocates this sum into an investment that yields an annual compound interest of 30%, compounded yearly. Calculate the profit Rahul achieves after two years.
    A Rs. 2512 Correct Answer Incorrect Answer
    B Rs. 2552 Correct Answer Incorrect Answer
    C Rs. 2532 Correct Answer Incorrect Answer
    D Rs. 2542 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Amount paid to bank at the end of 2nd year = (8800 × 20 × 2)/100 + 8800 = Rs. 12320 Amount received from scheme = 8800 × (1.3)2 = Rs. 14872 Profit received by Rahul = 14872 – 12320 = Rs. 2552

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