If the difference between the ci and si on a certain sum of money is rs. 72 at 12 per cent per annum for 2 years, then find the amount.
Answers
Step-by-step explanation:
LOGIN
SIGNUP
Search for a topic
Quantitative Aptitude > Simple Interest and Compound Interest > Difference Between CI and SI
Difference Between CI and SI
Compound and simple interest questions are common in the exams. There are always 3-4 questions appearing from this topic. This topic is very vast and that is why we have decided to cover it in parts and today we are going to discuss the difference between simple interest and compound interest.
Difference Between the Compound and Simple Interest
Sometimes you are given a situation and you have the option of repaying more it through compound interest or through simple interest. Obviously, you will choose simple interest because it is a cheaper option. Also, in compound interest, you are asked to pay the principal amount by levying interest on interest. But you would still need to determine the difference between the compound and simple interest. If the difference asked is for either two or three years than you can easily solve it through the formulas. Here are the formulas to the calculated difference in interests.
Browse more Topics under Si And Ci
Simple Interest
Compound Interest with a Fractional Rate
Data Sufficiency
SI and CI Practice Questions
Learn more about Simple and Compound Interest in more detail here.
compound and simple interest
If the difference between compound and simple interest is of two years than,
Difference = P(R)²/(100)²
Where P = principal amount, R = rate of interest
If the difference between compound and simple interest is of three years than,
Difference = 3 x P(R)²/(100)² + P (R/100)³.
Here also, P = principal amount, R = rate of interest
Test yourself by answering these 25 Practice Questions set of SI an CI.
Solved Examples
Q. The difference between the compound and simple interest on a certain sum at 12% per annum for two years is Rs. 90. What will be the value of the amount at the end of 3 years if compounded annually?
Ans: Here, in this question, the difference is already given to us and we are required to find the principal amount. And using that principal amount we are required to find the amount compounded after three years. The difference is given for two years. So, the formula will be,
Difference = P(R)²/100²
Now, putting the values into the equation, we will find that,
90 = P(12)²/(100)²
90 x 100²/12² = P
P = Rs. 6250
Now, calculating the compound interest on Rs. 6250 will be,
A = 6250(1 + 12/100)³
A = 6250(112/100)³ => 6250(1.12)³ => Rs. 8780.80
So, the compounded amount after three years will be Rs. 8780.80