Question
Kamal invested Rs. 6,250 in scheme 'A', which provided a
simple interest rate of 13% per annum. After 4 years, he reinvested the entire interest earned from scheme 'A' into scheme 'B', which offers a compound interest rate of 10% per annum, compounded annually. Calculate the total amount Kamal will receive from scheme 'B' after 2 years.Solution
Interest received from scheme ‘A’ = (6250 × 13 × 4) ÷ 100 = Rs. 3,250 Total amount received from scheme ‘B’ = 3250 × {1 + (10/100)}2 = 3250 × (110/100)2 = 3250 × 1.21 = Rs. 3,932.50
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