An amount compounded at the rate of interest of 20% per annum matures

1.	An amount compounded at the rate of interest of 20% per annum matures to be Rs. 14400 after 2 years. Find the simple interest on the same amount at the end of 2 years.1). Rs. 20002). Rs. 25003). Rs. 40004). Rs. 6000
Answer» <P>GIVEN data - RATE of INTEREST = 20% per annum Let the principle amount be P Rs. When compounded annually - As we know, Matured amount = $(Principle\;amount \times {\left( {1 + \frac{{rate\;of\;interest}}{{100}}} \right)^{time\;of\;investment}})$ $(\RIGHTARROW 14400 = {\rm{P}} \times {\left( {1 + \frac{{20\;}}{{100}}} \right)^2})$ 14400 = P × (1.2)² ∴ 14400 = 1.44P ∴ P = Rs. 10000 Simple interest on same amount for 2 years at 20% rate of interest- Simple interest = $(\frac{{principle\;amount\; \times \;rate\;of\;interest\; \times \;time\;of\;investment}}{{100}})$ Simple interest = $(\frac{{10000\; \times \;20\; \times \;2}}{{100}})$ ∴ Simple interest = Rs. 4000

An amount compounded at the rate of interest of 20% per annum matures to be Rs. 14400 after 2 years. Find the simple interest on the same amount at the end of 2 years.1). Rs. 20002). Rs. 25003). Rs. 40004). Rs. 6000

Answer»

<P>GIVEN data -

RATE of INTEREST = 20% per annum

Let the principle amount be P Rs.

When compounded annually -

As we know,

Matured amount = $(Principle\;amount \times {\left( {1 + \frac{{rate\;of\;interest}}{{100}}} \right)^{time\;of\;investment}})$

$(\RIGHTARROW 14400 = {\rm{P}} \times {\left( {1 + \frac{{20\;}}{{100}}} \right)^2})$

14400 = P × (1.2)²

∴ 14400 = 1.44P

∴ P = Rs. 10000

Simple interest on same amount for 2 years at 20% rate of interest-

Simple interest = $(\frac{{principle\;amount\; \times \;rate\;of\;interest\; \times \;time\;of\;investment}}{{100}})$

Simple interest = $(\frac{{10000\; \times \;20\; \times \;2}}{{100}})$

∴ Simple interest = Rs. 4000

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