Question

difference between compound interest and simple interest on a sum for three years at 5% per annum is rupees 122 the semis

Answer 1

C.i-s.i=61P/8000. (Formula when r=5%and t=3yrs)

122=(61*p)/8000

P=(122*8000)/61

=16000

Answer 2

The Simple interest formula :

Interest = Principle × rate × time

In this case let the Sum of money be P.

Simple interest = 3 × 0.05 × P = 0.15P

Compound interest:

P( 1 + i)ⁿ - P = Interest

P(1.05)³ = 1.157625P

Interest = 1.157625P - P = 0.157625P

The difference between the two :

0.157625P - 0.15P = 0.007625P

0.007625 P = 122

P = 122/0.007625

P = 16000

Rs 16000