Rs. 2500 is invested in scheme ‘A’ for a year at

Solution

Calculate the simple interest from scheme A Principal (P) = ₹2500 Rate of interest (R) = 25% per annum Time (T) = 1 year The formula for simple interest is: Substitute the values: The interest received from scheme A is ₹625.

Reinvest the interest in scheme B at compound interest Principal for scheme B = ₹625 (interest received from scheme A) Rate of interest (R) = 20% per annum Time (T) = 2 years The formula for compound interest (compounded annually) is: Substitute the values:

The total amount received from scheme B is ₹900.