Multiple choice

A sum of money was invested for 14 years was in a Scheme A which offers simple interest at a rate of 8% p.a. The amount received from Scheme A after 14 years was then invested for two years in Scheme B which offers compound interest ( compounded annually ) at a rate of 10 % p.a. If the interest received from Scheme B was Rs. 6678, what was the sum invested in Scheme B?

  1. Rs. 31,500

  2. Rs. 31,800

  3. Rs. 30,500

  4. Rs. 30,800
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let principal be P. After Scheme A (14 years, 8% SI): Amount = P(1 + 0.08×14) = 2.12P. In Scheme B (2 years, 10% CI): Interest = 2.12P[(1.10)² - 1] = 2.12P × 0.21 = Rs. 6678. So 2.12P = 6678/0.21 = Rs. 31,800. The key is tracking how the amount from one scheme becomes the principal for the next.

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