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      Question

      A sum of money amounts to Rs. 5600 at simple interest in

      4 years at 10% per annum. If the same principal is invested at compound interest for 2 years at 20% per annum, compounded annually, then what will be the amount?
      A Rs.4760 Correct Answer Incorrect Answer
      B Rs.5760 Correct Answer Incorrect Answer
      C Rs.5360 Correct Answer Incorrect Answer
      D Rs.5210 Correct Answer Incorrect Answer
      E None of these Correct Answer Incorrect Answer

      Solution

      At simple interest, Amount = Principal + SI 5600 = P + (P x 10 x 4)/100 5600 = P + 0.4P 5600 = 1.4P P = 4000 Now at compound interest for 2 years at 20%: Amount = 4000 x (120/100)^2 = 4000 x 1.44 = 5760 Hence, the correct answer is Rs. 5760.

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