Question Details

Answer the following question based on the information provided.

Liam deposited x dollars in account A for three years at a rate of 12% p.a. simple interest, whereas Sophia deposited (x+4000) dollars in account B for two years at 20% p.a. compound interest. Find the amount deposited by Sophia if the total interest accumulated from both accounts is 3360 dollars.

Options

A

3500

B

6000

C

4500

D

5200

E

2000

Show Answer

Correct Answer :

Option B

6000

Solution :

The correct answer is 6000.


Step 1: Understand the given details
Let Liam's initial deposit in Account A be x dollars.
Liam's account conditions:
- Principal (PA) = x
- Time (TA) = 3 years
- Rate of interest (RA) = 12% per annum simple interest

Sophia's account conditions:
- Principal (PB) = (x+4000) dollars
- Time (TB) = 2 years
- Rate of interest (RB) = 20% per annum compound interest

Total interest earned from both accounts combined = 3360 dollars.


Step 2: Calculate the Simple Interest from Account A
The formula for Simple Interest (SI) is:

SI=P×R×T100

Substituting the values for Account A:

SIA=x×12×3100=36x100=0.36x


Step 3: Calculate the Compound Interest from Account B
The formula for Compound Interest (CI) over 2 years is:

CI=P×1+R100T-1

Substituting the values for Account B:

CIB=(x+4000)×1+201002-1

CIB=(x+4000)×(1.2)2-1

CIB=(x+4000)×(1.44-1)

CIB=0.44×(x+4000)=0.44x+1760


Step 4: Form the total interest equation and solve for x
Total Interest = SIA+CIB

0.36x+0.44x+1760=3360

0.80x+1760=3360

0.80x=3360-1760

0.80x=1600

x=16000.80=2000


Step 5: Find the amount deposited by Sophia
The amount deposited by Sophia is (x+4000) dollars.

Sophia's deposit=2000+4000=6000

Thus, the amount deposited by Sophia is 6000 dollars.

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