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Q. Anchal deposits Rs. P with a bank at r% compound interest and sees it reach Rs. 27P in 36 years. If he had invested the same amount at r% simple interest for 25 years, what would be the final amount?
  1. 2.3P to 2.5P
  2. 18P to 19P
  3. 5.6P to 6.1P
  4. 3.25P to 3.5P


Solution

The correct option is D 3.25P to 3.5P
P(1+r)36=27P(1+r)36=27(1+r)123=33(1+r)12=3
 In order for the money to triple, the approximate formula for r=115n=11512=9.6
Rate of interest should be roughly 9% -10%
If he had invested this in simple interest,
A=P+P×25×9to10%100=3.25P to 3.5P
 

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