Mr. X invested an amount for 2 years at 15% per annum at simple interest. Had the interest been compounded, he would have earned Rs. 450/-… — Answer & Discussion

Mr. X invested an amount for 2 years at 15% per annum at simple interest. Had the interest been compounded, he would have earned Rs. 450/- more as interest. What was the amount invested?

ARs. 20,000
BRs. 25,000
CRs. 24, 000
DNone of these

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Discussion 1

CCommunity09 Jun 2019

Let P = principal, R = rate of interest and N = time period

Simple interest = PNR/100

Compound interest = P(1 + R/100)n – P

Given,

Simple interest = (P × 2 × 15)/100 = 3P/10

Given,

Compound interest = P(1 + 15/100)2 – P

= P(115/100) × (115/100) – P

= 129P/400

Given,

⇒ 129P/400 – 3P/10 = 450

⇒ 9P/400 = 450

⇒ P = 20000

∴ Amount invested is Rs 20000.