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    Question

    A sum when invested at simple interest of 12% p.a.

    becomes Rs. 2,080 in 5 years. If the same sum was invested at compound interest of 20% p.a. for 2 years, then what would be the amount received?
    A Rs. 1,728 Correct Answer Incorrect Answer
    B Rs. 1,872 Correct Answer Incorrect Answer
    C Rs. 1,800 Correct Answer Incorrect Answer
    D Rs. 1,920 Correct Answer Incorrect Answer
    E Rs. 2,000 Correct Answer Incorrect Answer

    Solution

    Simple interest = (Sum × Rate of interest × Time period) ÷ 100 Let the sum invested be Rs. ‘P’ So,
    2080 − P = (P × 12 × 5) ÷ 100 Or,
    2080 − P = 0.6P Or,
    2080 = 1.6P So,
    P = 1300 Amount received from second investment =
    1300 × (1 + 20/100)²
    = 1300 × 1.44
    = Rs. 1,872

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