Direction: These questions are based on the information give in the following graph.
-
Samir invested Rs.10,000 in the company 'A' for one year in 2006. He reinvested the total amount along with interest for next one year in 2007. If he had invested for both years in the Company 'B', what would have been the difference between the interests earned?
-
- Rs. 16.50 less
- Rs. 116.50 more
- Rs. 128.50 less
- Rs. 128.50 more
Correct Option: B
We can apply the formula to calculate the interest amount
I = P x R x t where
A = Total Accrued Amount (principal + interest)
P = Principal Amount
I = Interest Amount
R = Rate of Interest per year as a percent;
t = Time Period involved in years
For Company A in 2006,
Principle amount = 10000
Rate of interest = 11.5 % ( As per given graph for company A in 2006)
Time = 1 year
The interest amount received by Samir in 2007 I = P x R x t
The interest amount received by Samir in 2007 = 10000 x 11.5 x 1/100= 10000 x 115 x 1/10 x 100 = 10 x 115 = 1150
Total amount received by Samir in 2007 = Interest amount + Principal amount = 10000 + 1150 = 11150
Again For Company A in 2007,
Principle amount = 11150
Rate of interest = 15 % ( As per given graph for company A in 2007)
Time = 1 year
The interest amount received by Samir in 2008 I = P x R x t
The interest amount received by Samir in 2008 = 11150 x 15 x 1/100 = 1115 x 15/10 = 1115 x 3/2 = 3345/2 = 1672.5
Total amount received by Samir in 2008 = Interest amount + Principal amount = 11150+ 1672.5 = 12822.50
Hence, their interest = 12822.50 - 10000 = 2822.50
For Company B in 2006,
Principle amount = 10000
Rate of interest = 13.5 % ( As per given graph for company B in 2006)
Time = 1 year
The interest amount received by Samir in 2007 I = P x R x t
The interest amount received by Samir in 2007 = 10000 x 13.5 x 1/100= 10000 x 135 x 1/10 x 100 = 10 x 135 = 1350
Total amount received by Samir in 2007 = Interest amount + Principal amount = 10000 + 1350 = 11350
Again For Company B in 2007,
Principle amount = 11350
Rate of interest = 14 % ( As per given graph for company B in 2007)
Time = 1 year
The interest amount received by Samir in 2008 I = P x R x t
The interest amount received by Samir in 2008 = 11350 x 14 x 1/100 = 1135 x 14/10 = 1135 x 7/5 = 227 x 7 = 1589
Total amount received by Samir in 2008 = Interest amount + Principal amount = 11350+ 1589 = 12939
Since, their interest = 12939 - 10000 = Rs. 2939
Hence, difference between the interests earned = 2939 - 2822.50 = Rs. 116.50
If Samir had invested the amount in company B for both years then he would get Rs. 116.50 more.
