Question

    The interest received by investing Rs. 1000 for 2 years at compound interest of 20% p.a., compounded annually, was re-invested for 4 years at simple interest of 20% p.a. Find the simple interest received.

    A Rs. 350 Correct Answer Incorrect Answer
    B Rs. 353 Correct Answer Incorrect Answer
    C Rs. 352 Correct Answer Incorrect Answer
    D Rs. 354 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Compound Interest received = 1000 × {1 + (20/100)}2 – 1000 = 1000 × (12/10)2 – 1000 = 1440 – 1000 = Rs. 440 Simple interest received = 440 × 4 × 20 ÷ 100 = Rs. 352

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