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    Question

    What was the total compound interest on a sum after three years?

    Statement I - The  interest  after  one  year  was  Rs.  200  and  the  sum was Rs. 1000.

    Statement II - The difference between simple interest and compound interest on a sum of Rs. 2000 at the end of two years was Rs. 20

    A Only Statement I alone. Correct Answer Incorrect Answer
    B Only Statement II alone. Correct Answer Incorrect Answer
    C Both Statements I and II together. Correct Answer Incorrect Answer
    D Neither Statement I nor II is sufficient. Correct Answer Incorrect Answer
    E Either Statement I or II. Correct Answer Incorrect Answer

    Solution

    From statement I: r = (200 × 100)/1000 = 20% P = Rs. 1000 , r = 20%, t = 3 years Hence, from statement I we can find CI. From statement II: SI = (2000 × r × 2)/100 = 40r CI = 2000 [(1+(r/100)2) – 1] Therefore,  CI  –  SI  = 2000 [(1+(r/100)2) – 1] – 40r We can find the value of r from the above equation. Hence , CI can be determined.

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