Question

A sum of money is lent at a certain rate of
compound interest. If, instead the same amount was
lent at the same rate under simple interest, the
interest for the first two years reduces by 120 and
that for the first three years by 366. Find the sum.
(A) 348,000
(B) 350,000
(C) 58,000
(D) 354,000​

Answer 1

Given:

A sum of money is lent at a certain rate of  compound interest. If, instead the same amount was  lent at the same rate under simple interest, the  interest for the first two years reduces by 120 and  that for the first three years by 366.

To find:

Find the sum.

Solution:

From given, we have,

B is the difference between 2 years of interest, therefore B = 120

The difference between 3 years of C.I and S.I

= 3B+C = 366

120 × 3 + C = 366

C is calculated on 6

rate = 6/120 × 100 = 5%

A = 120/5 × 100 = 2400

P = 2400/5 × 100 = 48,000

Therefore, the sum is Rs. 48,000