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A person invests Rs. 1000 at 10% annual compound interest for 2 years. At the end of two years the whole amount is invested at an annual simple interest of 12% for 5 years. The total value of the investment finally is;
- a)1776
- b)1760
- c)1920
- d)1936
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
A person invests Rs. 1000 at 10% annual compound interest for 2 years...
Compound interest for 1st 2 years and simple interest for the next 5 years.
View all questions of this test
Interest after 1 year = Rs 100 (10% of 1000)
Thus, prime amount after 1 year = RS 1100
Interest after 2 year = Rs 110 (10% of 1100)
Thus, prime amount = Rs 1210
Interest after 5years @12% simple interest on Rs 1210
= 1210 × 0.12 × 5 = Rs 726
Hence total value =1210+726 = RS 1936
Most Upvoted Answer
A person invests Rs. 1000 at 10% annual compound interest for 2 years...
Given:
Principal amount (P) = Rs. 1000
Rate of compound interest (r) = 10% = 0.10
Time period for compound interest (t) = 2 years
Rate of simple interest (R) = 12% = 0.12
Time period for simple interest (T) = 5 years
Calculation:
Step 1: Calculate the compound interest:
Compound Interest (CI) = P(1 + r)^t - P
= 1000(1 + 0.10)^2 - 1000
= 1000(1.10)^2 - 1000
= 1000(1.21) - 1000
= 1210 - 1000
= 210
Step 2: Calculate the total amount after compound interest:
Total Amount after compound interest = P + CI
= 1000 + 210
= 1210
Step 3: Calculate the simple interest:
Simple Interest (SI) = PRT
= 1210 × 0.12 × 5
= 726
Step 4: Calculate the total value of the investment:
Total Value of the Investment = Total Amount after compound interest + Simple Interest
= 1210 + 726
= 1936
Hence, the correct answer is option D. The total value of the investment finally is Rs. 1936.
Principal amount (P) = Rs. 1000
Rate of compound interest (r) = 10% = 0.10
Time period for compound interest (t) = 2 years
Rate of simple interest (R) = 12% = 0.12
Time period for simple interest (T) = 5 years
Calculation:
Step 1: Calculate the compound interest:
Compound Interest (CI) = P(1 + r)^t - P
= 1000(1 + 0.10)^2 - 1000
= 1000(1.10)^2 - 1000
= 1000(1.21) - 1000
= 1210 - 1000
= 210
Step 2: Calculate the total amount after compound interest:
Total Amount after compound interest = P + CI
= 1000 + 210
= 1210
Step 3: Calculate the simple interest:
Simple Interest (SI) = PRT
= 1210 × 0.12 × 5
= 726
Step 4: Calculate the total value of the investment:
Total Value of the Investment = Total Amount after compound interest + Simple Interest
= 1210 + 726
= 1936
Hence, the correct answer is option D. The total value of the investment finally is Rs. 1936.
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A person invests Rs. 1000 at 10% annual compound interest for 2 years. At the end of two years the whole amount is invested at an annual simple interest of 12% for 5 years. The total value of the investment finally is;a)1776b)1760c)1920d)1936Correct answer is option 'D'. Can you explain this answer?
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