Explanation
The correct answer is option D as the difference in the amounts invested in both the schemes is Rs 5,000. Effective compound interest in scheme P at 10% rate for 2 years = 10 + 10 + (10×10)/100 = 21%. Effective interest in scheme Q at 20% rate for 2 years = 20 + 20 + (20×20)/100 = 44%. Let the amount invested in scheme P be x, then the investment in Q will be (25,000 – x). Total interest: 0.21x + 0.44(25,000 - x) = 7,550 => 0.21x + 11,000 - 0.44x = 7,550 => 11,000 - 0.23x = 7,550 => 0.23x = 11,000 - 7,550 = 3,450 => x = 3,450 / 0.23 = Rs 15,000. Hence, investment in scheme P = Rs 15,000 and investment in scheme Q = Rs 25,000 – 15,000 = Rs 10,000. The difference in investment of both is = Rs 15,000 – 10,000 = Rs 5,000.