MCQ

A sum is divided between A and B in the ratio of 1: 2. A purchased a car from his part, which `14 2/7%` depreciates per annum and B deposited his amount in a bank, which pays him20% interest per annum compounded annually. By what percentage will the total sum of money increase after two years due to this investment pattern (approximately).

#### Options

20%

26.66%

30%

25%

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#### Solution

**20%**

**Explanation:**

Let the sum be x and 2x

**Case I**

A = `"x"[1-100/700]^2=(36"x")/49`

**Case II**

A = `"2x"[1+20/100]^2=(72"x")/25`

Total A`=(36"x")/49+(72"x")/25`

Increase`=(36"x")/49+(72"x")/25-3"x"`

Increase`=(25xx36"x"+49xx72"x"-3"x"xx49xx25"x")/(49xx25)`

`=(753"x")/(49xx25)`

% increase`=(753"x")/(49xx25xx3"x")xx100`

= 20% approx

Concept: Simple and Compound Interest

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