Question

A sum of money is lent at 8% p. a compound interest. If the interest for the second year exceeds that for the first year by $96,find the sum of money.

Answer 1

Step-by-step explanation:

ASSUME P = 100$

GIVEN:

• RATE = 8% p.a.
• CI 2 - CI 1 = 96$

WE KNOW THAT

• CI 1 = (PNR)/100
• = ( 100 × 1 × 8)/100
• = 8$ ------- 1

• CI 2 = (PNR)/100
• ( 108 × 1 × 8)/100
• = 8.64$

CI 2 - CI 1 = 0.64$

USING UNITARY METHOD:

DIFFERENCE. PRINCIPLE

0.64. 100

96. X

USING DIRECT VARIATION, WE GET:

0.64x = 9600

therefore,

ANSWER) x = 15000$

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