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    Question

    Raju invested a certain sum at

    25% p.a. compound interest, compounded annually, and earned an interest of Rs. 2925 in 2 years. What will be the interest when the same amount is invested at 20% p.a. simple interest for three years?
    A Rs.3120 Correct Answer Incorrect Answer
    B Rs.2320 Correct Answer Incorrect Answer
    C Rs.1520 Correct Answer Incorrect Answer
    D Rs.2300 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    ATQ,

    Compound Interest Formula: A = P × (1 + R/100)^T Given: Interest earned = Rs. 2925 Rate = 25% p.a. Time = 2 years A = P × 1.5625 Interest earned = A - P = 2925, P × 0.5625 = 2925 P = 2925 / 0.5625 P = 5200 Simple Interest Formula: SI = (P × R × T) / 100 Given: Principal = Rs. 5200 Rate = 20% p.a. Time = 3 years SI = (5200 × 20 × 3) / 100 SI = 3120 Hence, The interest earned with 20% p.a. simple interest for 3 years is Rs. 3120.

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