Question

The simple interest on a sum of money for 2 years at 4% per annum is ₹ 340. Find

1. the sum of money and
2. the compound interest on this sum for one year payable half yearly at the same rate.

Answer 1

i. Given: S.I. = ₹ 340, T = 2 years, R = 4%, P = ?

`S.I. = (P xx R xx T)/100`

or `P = (S.I. xx 100)/(R xx T)`

= `(340 xx 100)/(4 xx 2)`

= ₹ 4250

ii. Given: T = 1 years = 1 × 2 = 2 times,

R = 4% ⇒ R = 2% (For half yearly.)

`C.I. = P[(1 + R/100)^T - 1]`

= `4250[(1 + 2/100)^2 - 1]`

= `4250[101/2500]`

= ₹ 171.70