If the compound interest on a certain sum for 2 years at 12% per annum is 1,590, what would be the simple interest?
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Answer:
Given:
The compound interest on a certain sum at a rate of 12% per annum for 2 years is ₹ 1,590.
Concept used:
C.I = P[(1 + R/100)T - 1]
S.I = (P × T × R)/100
Here,
P = Sum
T = Time
R = Rate
Calculation:
Let the sum be P
According to the question,
1590 = P[(1 + 12/100)2 - 1]
⇒ 1590 = P[(1 + 3/25)2 - 1]
⇒ 1590 = P[(28/25)2 - 1]
⇒ 1590 = P[(784/625) - 1]
⇒ 1590 = P[(784 - 625)/625]
⇒ 1590 = P[159/625]
⇒ 6250 = P
So, sum = ₹ 6250
Now,
S.I = (6250 × 4 × 6)/100
⇒ 1500
∴ Required simple interest is ₹ 1,500.
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