Question

The difference between simple interest and compound interest compounded annually on a certain sum is Rs.448 for 2 years at 8 percent per annum. Find the sum.

Answer 1

Since, C.I.
= A - P

C.I. = `(1 + 8/100)^2 - "P"`

= `"P"(108/100)^2 - "P"`

= `(11664"P")/(10000) - "P"`

= `(11664"P" - 10000"P")/(10000)`

= `(1664"P")/(10000)`

S.I. = `("P" xx 8 xx 2)/(100)`

= `(16"P")/(100)`

Now, C.I. - S.I = Rs.448

⇒ `(1664"P")/(10000) - (16"P")/(100)` = Rs.448

⇒ `(1664"P" - 1600"P")/(10000)` = Rs.448

⇒ 64P = Rs.4480000
⇒ P = Rs.70000
Hence, the sum is Rs.70000.