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On What Sum of Money Will the Difference Between the Compound Interest and Simple Interest for 2 Years Be Equal to Rs. 25 If the Rate of Interest Charged for Both is 5% P.A.?

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Question

On what sum of money will the difference between the compound interest and simple interest for 2 years be equal to Rs. 25 if the rate of interest charged for both is 5% p.a.?

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Solution

C.I = `P[(1 + r/100)^2 - 1] = P[(1 + 5/100)^2 - 1] = "41P"/400`

`S.I = (P xx 5 xx 2)/100 = P/100`

Given, C.I. - S.I. Rs. 25

`=> "41P"/400 - P/10 = 25`

`=> (41P - 40P)/400 = 25`

`=> P = 10000`

∴ Required sum  = Rs. 10,000

shaalaa.com
Concept of Compound Interest - Compound Interest as a Repeated Simple Interest Computation with a Growing Principal
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2011-2012 (March)

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