Question

16. The difference between SI and CI on a sum
of money at the rate of 5% per annum for two
years is 25. What is the principal?
(a) 1000
(b) 10,000
(c) 5000
(d) 2500​

Answer 1

Answer:

If the difference between compound and simple interest is of two years than,

Difference = P(R)²/(100)²

Where P = principal amount, R = rate of interest

If the difference between compound and simple interest is of three years than,

Difference = 3 x P(R)²/(100)² + P (R/100)³.

Here also, P = principal amount, R = rate of interest

The difference between the compound and simple interest on a certain sum at 12% per annum for two years is Rs. 90. What will be the value of the amount at the end of 3 years if compounded annually?

Ans: Here, in this question, the difference is already given to us and we are required to find the principal amount. And using that principal amount we are required to find the amount compounded after three years. The difference is given for two years. So, the formula will be,

Difference = P(R)²/100²

Now, putting the values into the equation, we will find that,

90 = P(12)²/(100)²

90 x 100²/12² = P

P = Rs. 6250

Now, calculating the compound interest on Rs. 6250 will be,

A = 6250(1 + 12/100)³

A = 6250(112/100)³ => 6250(1.12)³ => Rs. 8780.80

So, the compounded amount after three years will be Rs. 8780.80

Step-by-step explanation: