Multiple choice

A person deposited Rs. (K + 800) at 20% p.a. compound interest for two years, and received interest of Rs. 3388. If instead he invested Rs (K – 600) at the same rate for the same period, what would be the compound interest received by him (in Rs)?

  1. 2100

  2. 2750

  3. 2340

  4. 2772

  5. 3150
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D Correct answer
Explanation

Compound interest formula: A = P(1 + r/n)^(nt). Here, 3388 = (K + 800) * ((1 + 0.20)^2 - 1). 3388 = (K + 800) * (1.44 - 1) = (K + 800) * 0.44. K + 800 = 7700, so K = 6900. Then K - 600 = 6300. Interest = 6300 * 0.44 = 2772.

AI explanation

Using the compound interest formula for two years, the interest on Rs. (K + 800) at 20% is (K + 800) multiplied by (44/100), which equals 3388. Solving this equation gives K + 800 equals 7700, so K equals 6900. The new principal is K - 600, which is 6300. The compound interest on Rs. 6300 at 20% for two years is 6300 multiplied by 0.44, which equals Rs. 2772.

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