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    Question

    Rahul placed Rs. 40,000 between two investment options,

    ā€˜Eā€™ and ā€˜Fā€™, for 6 years and 3 years, respectively. Option ā€˜Eā€™ accrues simple interest at 10% per annum, and option ā€˜Fā€™ grows by compound interest (compounded annually) at 20% per annum. What amount was put into option ā€˜Fā€™ if the interest from ā€˜Eā€™ exceeds that from ā€˜Fā€™ by Rs. 1,200?
    A Rs.18,000 Correct Answer Incorrect Answer
    B Rs.15,000 Correct Answer Incorrect Answer
    C Rs.25,000 Correct Answer Incorrect Answer
    D Rs.20,000 Correct Answer Incorrect Answer
    E none of these Correct Answer Incorrect Answer

    Solution

    ATQ, Let the investment in option ā€˜Fā€™ be Rs. ā€˜zā€™. Investment in ā€˜Eā€™ = Rs. (40000 - z). Simple interest from ā€˜Eā€™ = (40000 - z) Ɨ 10% Ɨ 6. Compound interest from ā€˜Fā€™ = z Ɨ [{1 + (20/100)}3 - 1]. Solving the equation for ā€˜zā€™ based on the interest difference, z = Rs. 15,000.

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