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    Question

    A person invested Rs. 7500 at a simple interest rate of

    12% per annum, and also invested Rs. 8000 at a compound interest rate of 15% per annum, compounded annually. Calculate the difference between the interest earned on both investments after 2 years.
    A Rs. 960 Correct Answer Incorrect Answer
    B Rs. 640 Correct Answer Incorrect Answer
    C Rs. 720 Correct Answer Incorrect Answer
    D Rs. 780 Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    Interest earned on simple interest = 7500 X 0.12 X 2 = Rs. 1800 Interest earned on compound interest = 8000 X (1.15) 2 - 8000 = 8000 X (1.3225) - 8000 = Rs. 2,580 Therefore, required difference = 2580 - 1800= Rs. 780

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