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    Question

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

    ‘E’ and ‘F’, for 6 years and 3 years, respectively. Option ‘E’ accrues simple interest at 10% per annum, and option ‘F’ grows by compound interest (compounded annually) at 20% per annum. What amount was put into option ‘F’ if the interest from ‘E’ exceeds that from ‘F’ 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 ‘F’ be Rs. ‘z’. Investment in ‘E’ = Rs. (40000 - z). Simple interest from ‘E’ = (40000 - z) × 10% × 6. Compound interest from ‘F’ = z × [{1 + (20/100)}3 - 1]. Solving the equation for ‘z’ based on the interest difference, z = Rs. 15,000.

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