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The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 8% per annum is Rs. 40. What is the sum?1). Rs. 125002). Rs. 62503). Rs. 250004). Rs. 18750 |
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Answer» We know the formula for compound interest - $(\Rightarrow {\RM{CI}} = {\rm{}}\left[ {{\rm{P}}\left\{ {{{\left( {1{\rm{}} + {\rm{}}\frac{{\rm{R}}}{{100}}} \right)}^t} - 1} \right\}} \right])$ Where, CI = Compound interest P = PRINCIPAL R = Rate of interest T = Time period Let the principal be P CI = P (1 + 8/100) 2 - P = 104P/625 SI = P × 8 × 2/100 = 4P/25 CI - SI = 40 104P/625 - 4P/25 = 40 P = 40 × 625/4 = RS. 6250 |
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