Question
A certain principal amounts to Rs. 6300 in 6 years and
Rs. 7100 in 8 years on simple interest. Calculate the interest earned when invested at 15% p.a. compound interest for 2 years.Solution
ATQ,
Simple interest earned in two years = 7100 – 6300 = Rs. 800
Simple interest earned in 1 year = Rs. 400
So, sum invested = 6300 – 6 × 400 = 6300 – 2400 = Rs. 3900
Desired interest = [(1.15)² – 1] × 3900 = 0.3225 × 3900 = Rs.1257.75
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