Multiple choice

Ramesh invests Rs. 20,000 for 8 years in a savings scheme offering 10% interest per annum, compounded annually. Separately, Sunil invests a certain sum, in the same scheme for 4 years. After 4 years, Sunil reinvests the amount he receives at the end of 4 years for another 4 years at 2.5% simple interest. If both Ramesh and Sunil receive the same amount at the end of 8 years, what was the initial amount, in rupees, deposited by Sunil?

  1. 22,820

  2. 23,600

  3. 24,850

  4. 26,620
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Ramesh: 20000(1.1)^8 = 42871.77. Sunil: P(1.1)^4 * (1 + 0.025*4) = P(1.4641)(1.1) = P(1.61051). Setting P(1.61051) = 42871.77 gives P = 26620.

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