Correct Answer - Option 3 : Rs. 144
Given:
Sum borrowed by Zaved for 2 years = Rs.10000
Amount paid by Zaved at the end of 2 years = Rs.12544
Formulas used:
When interest compounded annually;
Amount = Principal × (1 + r/100)n
Amount at simple interest;
Amount = Principal + Principal × Rate/100 × Time
Calculation:
12544 = 10000 × (1 + r/100)2
⇒ 12544/10000 = (1 + r/100)2
⇒ √(784/625) = 1 + r/100
⇒ 28/25 - 1 = r/100
⇒ 3/25 = r/100
⇒ 25r = 300
⇒ r = 300/25 = 12%
Amount at the end of 2 years at 12% per annum simple interest;
Amount = 10000 + 10000 × 12/100 × 2
⇒ 10000 + 2400
⇒ 12400
∴ The Amount saved by Zaved = Rs.12544 - Rs.12400 = Rs.144