2019 · Q15
The rate of interest on two different schemes is the same and it is 20%. But in one of the schemes, the interest is compounded half-yearly and in the other, the interest is compounded annually. Equal amounts are invested in the schemes. If the difference of the returns after 2 years is Rs. 482, then what is the principal amount in each scheme?
Elementary MathematicsSimple and Compound Interest
- ARs. 10,000
- BRs. 16,000
- CRs. 20,000
- DRs. 24,000
Explanation
Half-yearly compounding at 20%: rate 10% per half-year, amount factor (1.1)^4 = 1.4641. Annual compounding: (1.2)^2 = 1.44. Difference = 0.0241 x P = 482, so P = 482/0.0241 = Rs. 20,000.