Question
An amount of Rs. 3,000 is invested for 2 years at a
compound interest rate of 10% per annum. The interest gained is used to buy an item. If the item is then sold at a gain of 20%, determine its selling price.Solution
ATQ,
Compound interest earned = 3000 × {1 + (10/100)}² – 3000
= 3000 × (1.1)² – 3000
= 3000 × 1.21 – 3000 = 3630 – 3000 = Rs. 630
Selling price of the item = 630 × 1.20 = Rs. 756
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