Multiple choice

Suresh invested a sum of money in Scheme A for 17 years, which offered at a rate 7% p.a for 1st 11 years and 8% p.a for last 6 years. The amount received from Scheme A after 17 years was then invested in scheme B, which offers compound interest at a rate 12% p.a. If the interest received after 2 years from Scheme B was Rs. 5724, what was the sum invested inScheme A?

  1. A. 12000

  2. 12500

  3. 10000

  4. 10500

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Let P be the sum. Amount after 17 years = P * (1 + 0.07*11 + 0.08*6) = P * (1 + 0.77 + 0.48) = 2.25P. Compound interest on 2.25P for 2 years at 12% is 2.25P * ((1.12)^2 - 1) = 2.25P * 0.2544 = 0.5724P. Setting 0.5724P = 5724 gives P = 10000.

Keep practicing — related questions