Question
A person invested Rs. 7500 at a simple interest rate of
12% per annum, and also invested Rs. 8000 at a compound interest rate of 15% per annum, compounded annually. Calculate the difference between the interest earned on both investments after 2 years.Solution
Interest earned on simple interest = 7500 X 0.12 X 2 = Rs. 1800 Interest earned on compound interest = 8000 X (1.15)Â 2Â - 8000 = 8000 X (1.3225) - 8000 = Rs. 2,580 Therefore, required difference = 2580 - 1800= Rs. 780
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