Question
A certain sum amounts to Rs. 4900 in 2 years and to Rs.
5929 in 3 years, when invested at R% p.a. compound interest, compounded annually. Find the amount received when Rs. 3500 is invested at (R – 10)% p.a. simple interest for 2 years.Solution
Let, the sum invested at compound interest be Rs. ‘P’ According to the question, {P(1 + R/100)³}/{P(1 + R/100)²} = 5929/4900 Or, (1 + R/100) = 1.21 = (1 + 21/100) Or, R = 21 Therefore, new rate of interest = 21 – 10 = 11% Required amount received at simple interest
= {(3500 × 11 × 2)/100} + 3500
= 770 + 3500
= Rs. 4270
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