Question

Determine the sum for which the difference in the compound interest and simple interest at 50%p.a.for 2years is Rs.700.

Answer 1

Simple interest :

Principle × rate × time

P × 0.5 × 2 =P

Compound interest :

P(1.50)³ = 3.375P

3.375P - P = 2.375P = interest

2.375P - P = 1.375 P

1.375P = 700

P = 700/1.375

= 509.09