A sum of money is invested for 2 year ata the rate of 12 % per annum compounded annually. If it was invested as simple interest ,the interest would be 72 rs less than the compound interest . find the sum of money
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Step-by-step explanation:
It is given that
Simple Interest (SI) = 1380
Rate of interest (R) = 12% p.a.
Period(T)= 2 years
(i) We know that
Sum(P) = (SI×100)/(R×T)
Substituting the values
=(1380×100)/(12×2)
= 5750
(ii) Here
Principal (P)= 5750
Rate of interest (R)= 12% p.a or 6% half- yearly
Period (n) = 1 year - 2 half years
So we get
Amount (A)= P(1 + R/100)
Substituting the values
=5750(1+6/100)2
By further calculation
= 5750×(53/50)2
So we get
=5750×53/50×53/50
= 6460.70
Here
Compound interest = A- P
Substituting the values
= 6460.70−5750
= 710.70
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