On what sum of money will the difference between the compound interest and simple interest for 2 years be equal to ₹ 25 if the rate of interest charged for both is 5% p.a.?
Solution:
It is given that
Sum (P) = ₹ 100
Rate (R) = 5% p.a.
Period (n) = 2 years
We know that
SI = PRT/100
Substituting the values
= (100 × 5 × 2)/ 100
= ₹ 10
So the amount when interest is compounded annually = P (1 + R/100)n
Substituting the values
= 100 (1 + 5/100)2
By further calculation
= 100 × (21/20)2
= 100 × 21/20 × 21/20
So we get
= ₹ 441/4
Here
CI = A – P
Substituting the values
= 441/4 – 100
= ₹ 41/4
So the difference between CI and SI = 41/4 – 10 = ₹ ¼
If the difference is ₹ ¼ then sum = ₹ 100
If the difference is ₹ 25 then sum = (100 × 4)/ 1 × 25 = ₹ 10000
More Solutions:
- Compound interest on ₹ 8000 at 5% per annum for 2 years.
- A man invests ₹ 46875 at 4% per annum compound interest for 3 years.
- Compound interest for the second year on ₹ 8000 for three years at 10% p.a.
- Ramesh invests ₹ 12800 for three years.
- Sum of money for 2 years at 12% per annum is ₹ 1380.
- At the end of one year this sum amounts to ₹ 11200.
- At the end of first year it amounts to ₹ 5325.
- At the end of one year it amounts to ₹ 5600.
- Find the amount and the compound interest on ₹ 2000.