Question

Data Ram lends equal sum of money at the same rate of interest to A and B. The money lends to A becomes twice of the original amount in just four years at simple interest. While Data Ram lends to B for the first two years at compound interest and for the rest two years at simple interest. If the difference between the amount of A and B after 4 years is Rs. 2750. What is the amount of money that Data Ram lends to each one?

• A. Rs. 40000
• B. Rs. 6000
• C. Rs. 8000
• D. Rs. 80000

Answer 1

The correct option is C Rs. 8000

A : $P=\frac{P\times 4\times r}{100}$
r = 25%
B : $P{(1+\frac{25}{100})}^2=\frac{25P}{16}$
Again $\frac{25P}{16}\times \frac{2\times 25}{100}=\frac{25P}{32}$
Therefore total amount of A after 4 years = 2P
and total amount of B after 4 years $=\frac{25P}{16}+\frac{25P}{32}=\frac{75P}{32}$
Therefore difference in amount $=\frac{75P}{32}-2P=\frac{11P}{32}=2750$
$\Rightarrow$ P = 8000