Rs. 12,000 is invested at the rate of 8% p.a. for 4 years at simple interest in scheme 'A'. The amount received from scheme 'A' is then invested for 2 years at rate of 5% p.a., compounded annually in scheme 'B'. Find the amount received from scheme 'B'.
Show answer & explanation
Correct answer: A
Explanation
Given:
Principal = ₹12,000
Scheme A rate = 8% simple interest
Time = 4 years
Scheme B rate = 5% compound interest
Time = 2 years
Formula:
Simple interest = (P × R × T) / 100
Earlier in Scheme A
Simple interest = (12,000 × 8 × 4) / 100 = 3,840
Amount after Scheme A = 12,000 + 3,840 = 15,840
Compound amount = P(1 + R/100)ᵗ
Now in Scheme B
A = 15,840(1 + 5/100)²
= 15,840(1.05)² = ₹17,463.60