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    Question

    Nikhil invested two amounts, Rs. '2N' and Rs. '3N', at

    simple and compound interest rates respectively. The first amount, Rs. '2N', was invested at a simple interest rate of 25% per annum for a period of 2 years. The second amount, Rs. '3N', was invested at a compound interest rate of 20% per annum, also for 2 years. The interest for the compound investment was calculated annually. After the investment period, the difference between the interest earned from these two investment schemes was Rs. 480. Determine the value of 'N'.
    A 1,800 Correct Answer Incorrect Answer
    B 1,200 Correct Answer Incorrect Answer
    C 1,500 Correct Answer Incorrect Answer
    D 2,000 Correct Answer Incorrect Answer
    E 900 Correct Answer Incorrect Answer

    Solution

    Simple interest = Principal X time period in years X rate ÷ 100 = 2N X 2 X 25 ÷ 100 = Rs. 'N' CI = Sum x (1 + Rate/100)t - Sum Or, CI = 3N X (1.2)2 - 3N Or, CI = 3N X (1.44) - 3N Or, CI = 4.32N - 3N So, CI = 1.32N ATQ: 1.32N - N = 480 Or, 0.32N = 480 So, 'N' = 1,500

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