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.? 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 Concept: Concept of Compound Interest - Compound Interest as a Repeated Simple Interest Computation with a Growing Principal Is there an error in this question or solution? |