Compound Interest Practice Test 3

Question : 29 of 40

Marks: +1, -0

Sharma invested one-half of his savings in a bond that paid simple interest for 2 years and received Rs 550 as interest. He invested the remaining in a bond that paid compound interest, the interest being compounded annually for the same 2 years at the same rate of interest and received Rs 605 as interest. What was the value of his total savings before investing in these two bonds?

Rs 22,000
Rs 11,000
Rs 5,500
Rs 2,750

Validate

Solution:

Simple interest for 2 years = Rs 550
Simple interest for 1year = Rs 275
Simple interest and compound interest are same in the first year.
So,

275={P×1×R}/100

⇒27,500=PR

330={(P+275)×1×R}/100

33,000=PR+ 275 R

33,000 = 27,500 + 275R

5,500 = 275R

R=5500/275=20%

Now,

{P×20×1}/100=275

P=275×100/20=1375

So, his total savings before investing in two bonds is Rs 2,750.

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