Question

The difference between the S.I. and C.I. on a certain sum of money for 2 years at 4% per annum is Rs 20. Find the sum.

Answer 1

Given: 
CI - SI = Rs 20
\[\left[ P \left( 1 + \frac{4}{100} \right)^2 - P \right] - \frac{P \times 4 \times 2}{100} = 20\]
\[P\left[ \left( 1 . {04}^2 - 1 \right) \right] - 0 . 08P = 20\]
0.0816 P - 0.08 P = 20
0.0016 P = 20
\[P = \frac{20}{0 . 0016}\]
 = 12, 500
Thus, the required sum is Rs 12, 500.