Question

Scheme A offers 25% interest and scheme B offers 20% interest. M invested Rs.4000 in scheme A and Rs.6000 in scheme B at compound interest. After 2 years, he invested the amount received from scheme A and B in schemes B and A respectively at simple interest for 2 more years. If another person N invested Rs.6000 in scheme A and Rs.4000 in scheme B at compound interest. After 2 years, he invested the amount received from scheme A and B in schemes B and A respectively at simple interest for 2 more years, then what is the difference between total amount received by M and N after 4 years?

• A. Rs 110
• B. Rs 55
• C. Rs 135
• D. Rs 275
• E. None of these

Answer 1

The Correct Option is B

For M,
Total amount after 2 years from scheme A = 4000 * (1.25)² = Rs.6250
Total amount after 2 years from scheme B = 6000 * (1.2)² = Rs.8640
Now amount invested in scheme A and scheme B is Rs.8640 and Rs.6250 respectively.
Total amount after 4 years from scheme A = 8640 + \(\frac{(8640 * 25 * 2)}{100}\) = Rs.12960
Total amount after 4 years from scheme B = 6250 + \(\frac{(6250 * 20 * 2)}{100}\) = Rs.8750
Total amount after 4 years from both the schemes together = 12960 + 8750 = Rs.21710
For N,
Total amount after 2 years from scheme A = 6000 * (1.25)2 = Rs.9375
Total amount after 2 years from scheme B = 4000 * (1.2)2 = Rs.5760
Now amount invested in scheme A and scheme B is Rs.5760 and Rs.9375 respectively.
Total amount after 4 years from scheme A = 5760 + \(\frac{(5760 * 25 * 2)}{100}\) = Rs.8640
Total amount after 4 years from scheme B = 9375 + \(\frac{(9375* 20 * 2)}{100}\) = Rs.13125
Total amount after 4 years from both the schemes together = 8640 + 13125 = Rs.21765
Required difference = 21765 - 21710= Rs.55