Question

The compound interest on Rs. 4,000 for 2 years at 10% per annum is double the Simple interest on a certain sum of money for 3 years at 8% per annum. The sum placed on simple interest is :

• A. Rs. 1,750
• B. Rs. 1,850
• C. Rs. 1,650
• D. Rs. 1,950

Answer 1

Answer:

A. Rs. 1,750

Compound interest on Rs 4,000 at 10% per annum for 2 years A = P(1 + R /100)^n = 4000 × 110/100 × 110/100 = 4840 I = 4840 - 4000 = 840 This interest is double the simple interest on a fixed sum at 8% per annum for 3 years. Simple interest = 840/2 = 420 Simple interest = PnR /100 420 = P × 3 × 8/100 P = 420 × 100/24 = 1750