Question
Rs. 2400 is deposited into scheme 'A' offering a simple
interest rate of 25% per annum over a period of 8 years. Simultaneously, Rs. 2500 is placed in scheme 'B' that provides a 20% annual compound interest, with the interest being compounded yearly for 2 years. Calculate the disparity in the interest amounts accrued from these two schemes.Solution
Interest received from scheme ‘A’ = (2400 × 25 × 8)/100 = Rs. 4800 Interest received from scheme ‘B’ = 2500(1 + 20/100)2 – 2500 = Rs. 1100 Required difference = 4800 – 1100 = Rs. 3700
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