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A certain sum is invested for 2 years in scheme M at 20% p.a. compound interest (compounded annually), Same sum is also invested for the same period in scheme N at k% p.a. simple interest. The interest earned from scheme M is twice of that earned from scheme N. What is the value of k?

Correct Answer: 11

Explanation:

Interest earned in scheme M =   


P 1   +   20 100 2     -   1     =   11 P 25


Interest earned in scheme N =  


P   x   k   x   2 100   =   P k 50


 


Now, from the given data,


 


11 P 25   =   2   x   P k 50


k = 11


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