Question

A sum of money at 8% Simple Interest was placed in a deposit for 7 years. The matured amount was then invested in a scheme offering 10% Compound Interest compounded annually, thereby procuring an interest of Rs.1638 in 2 years. What was the original sum?​

Answer 1

Rs. 5000

Explanation:

Let's suppose the principal amount= P

SI= PRT÷100

SI=P×8×7÷100=56P/100

Similarly, CI=Rs.1638

CI= P(1+r/100)ⁿ -P

1638=P(1+10/100)² - P

After solving this you will get P= Rs. 5000

Thus, the principal amount is Rs. 5000.