Multiple choice

Rs 1500 is invested for 5 yr in scheme A which offers 14% p.a simple interest. The amount received with some extra money is invested in scheme B for 2ys compound interest(compounded annually) at the rate of 20% p.a. If the compound interest received from scheme B is Rs 1408 /-, what was the additional money invested in scheme B ?

  1. Rs.650

  2. Rs.450

  3. Rs.500

  4. Rs.750

  5. Rs.300
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A Correct answer
Explanation

Scheme A: Rs.1500 at 14% SI for 5 years. Amount = 1500 + (1500×0.14×5) = 1500 + 1050 = Rs.2550. Let additional money in Scheme B be x. Total in B = 2550 + x at 20% CI for 2 years. CI = (2550+x) × [(1.2)² - 1] = (2550+x) × 0.44 = 1408. Solving: 2550+x = 1408/0.44 = 3200, so x = Rs.650. First find SI amount, then use CI formula.

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