Question

The difference between simple interest and compound interest on a certain sum is Rs. 54.40 for 2 years at 8 percent per annum. Find the sum.

Answer 1

Let principal (P) = x

R = 8%

T = 2 years

SI = `[X xx 8 xx 2]/100`

= `[4 X]/25`

CI = A − P

= `X (1 + 8/100)^2 - X`

= `X [(1 + 2/25)^2 - 1]`

= `X [(27/25)^2 - 1]`

= `104/625 X`

Given, CI = SI = 54.40

`(104 X)/(625) - (4 X)/(25)` = Rs. 54.40

`X (104/625 - 4/25 xx 25/25) = 54.40`

`X (4/625) = 54.40`

X = `(54.40 xx 625)/4`

X = Rs. 8500

Thus, principal sum = Rs. 8500