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    Question

    Abhishek allocates Rs.1600 each into two different

    investment schemes, A and B. Scheme A provides simple interest annually at a rate of (R-2)%, while scheme B compounds annually at a rate of R%. At the end of two years, the interest accumulated from scheme B surpasses that from scheme A by Rs.80. Determine the rate R%.
    A 12 Correct Answer Incorrect Answer
    B 10 Correct Answer Incorrect Answer
    C 8 Correct Answer Incorrect Answer
    D 7 Correct Answer Incorrect Answer
    E 5 Correct Answer Incorrect Answer

    Solution

    Interest earned by Scheme A = {1600 × (R – 2) × 2}/100 = 32(R – 2) Equivalent interest rate by scheme B for 2 years = (R + R + R2/100)% Interest earned by Scheme B = (1600/100) × (R + R + R2/100)=16 × (2R + R2/100) Therefore, according to question, 16 × (2R + R2/100) – 32(R – 2)= 80 16 × (2R + R2/100 – 2R + 4) =80 R2/100 + 4 = 5 R2/100 = 1 R2 = 100 R =√100 R = 10 

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