Question
Rs. 5,200 is split into two parts. One part is invested
at a simple interest rate of 12% per annum, while the other part is invested at a compound interest rate of 20% per annum, compounded annually. After 3 years, the total interest earned from both investments is Rs. 2,976. What is the amount that was invested at compound interest?Solution
Let the amount invested at 20% p.a. compound interest be Rs. ‘x’ The amount invested at 12% p.a. simple interest = Rs. (5200 – x) According to the question, [x × {1 + (20/100)}3 – x] + (5200 – x) × 12% × 3 = 2976 Or, (216x/125) – x + 1872 – (9x/25) = 2976 Or, (91x/125) – (9x/25) = 1104 Or, (46x/125) = 1104 So, x = 3000 Amount invested at 20% compound interest = Rs. 3,000
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