Question
An individual, "Y," invests Rs.
24,000 in each of two SIPs: "A" and "B." SIP "A" provides compound interest at an annual rate of "r%" for 2 years, compounded annually, while SIP "B" offers simple interest at the same annual rate of "r%" for 2 years. If the difference between the interest earned from SIP "A" and SIP "B" amounts to Rs. 777.6, determine the interest earned from SIP "B."Solution
ATQ, Difference between interests earned on investing Rs. 'p' each on simple interest at 'r'% p.a. and compound interest at 'r'% p.a. compounded annually for 2 years = p × (r2/10,000) So, 24,000 × (r2 /10,000) = 777.6 Or, (r2 /10,000) = (777.6/24,000) Or, (r2 /10,000) = 0.0324 Or, r2 = 324 So, 'r' = 18 Since, 't' can't be negative, so 'r' = 18% Simple interest = Principal × rate × time ÷ 100 Therefore, required interest = 24,000 × 18 × 2 ÷ 100 = Rs. 8,640
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