A sum of money is invested for 2 years at the rate of 12% per annum compounded annually. If it was invested at simple interest, the interest would be 72 less than the compound interest. Find the sum of money.
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Answer:
5000
Step-by-step explanation:
Compound interest =
A ⇒ P( 1 + 12/100² )
I ⇒ P( 1 + 12/100² ) - P
Simple Interest =
I ⇒ ( P × 2 × 12 )/100
Given, Difference = 72
Then,
P ( 1 + 12/100)² - P - ( P × 2 × 12)/100 = 72
P = 5000
∴ The sum of money is 5000
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