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An amount of Rs. 10,000 is compounded yearly at a 5% rate of interest for 2 years. If a certain amount is kept at a 10% rate of simple interest for 2 years then the interest earned is Rs. 350 less than that earned from the compound interest mentioned earlier. Calculate the value kept under simple interest.1. Rs. 33752. Rs. 42253. Rs. 57504. Rs. 4750 |
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Answer» Correct Answer - Option 1 : Rs. 3375 Given: Compound interest: P = 10000, R = 5%, n = 2 Simple Interest: R = 10%, n = 2 Formula used: Simple interest: (P × R × T) / 100 Compound interest: Amount = P (1 + (R/100))n Where, n = Number of years, P = Principal Amount, R = Rate of Interest, A = Amount Calculations: Find interest from amount compounded ⇒ A = 10000 × (1 + (5 / 100)2 ⇒ A = 10000 × (1 + (1 / 20))2 ⇒ A = 10000 × 21 × 21 / 400 ⇒ A = 25 × 212 ⇒ A = 11,025 ⇒ I = 11025 – 10,000 ⇒ I = 1025 Now, interest earned by simple interest ⇒ I = 1025 – 350 ⇒ I = 675 ⇒ 675 = P × 10 × 2 / 100 ⇒ 67500 / 20 = P ⇒ P = 3375 ∴ Value kept under simple interest is Rs. 3375 |
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