Question

A sum of Rs 4000 is split into two parts. One part is lent at simple interest and the other at compound interest, interest being compounded annually. At the end of two years, the total amount of interest earned is Rs 1720. Find the sum lent at simple interest, if each part is lent at 20% per annum (in Rs.)
A. 120
B. 1000
C. 800
D. 1500

Answer 1

Correct Answer - B
i) Let Rs `x` be lent at simple interest and Rs `(4000-x)` at compound interest.
ii) `(x xx 20 xx 2)/100 + (4000-x)[(1+20/100)^(2)-1]=1720`. Solve for `x`.