Question

on what sum of money does the difference between the simple interest and compound interest in 2 years at 5 per cent is rs.15

Answer 1

This just an example and it may help you.
et the capital be PIn simple interest , Interest for two years = P r n 100 = P x 8 x 2 / 100 = 16P/100= 0.16 Pwhere r is the rate and n is the number of yearsIn compound interest Capital + interest = P ( 1 + r/100 ) ^n = P ( 1 + 8/100 ) ^2= P x1.08^2= 1.1664 PHence In compound interest Interest for two years = 1.1664 P - P = 0.1664 P.Difference of interest = Rs 80 = 0.1664 P - 0.16 P = 0.0064 P0.0064 P = 80P = 80 / 0.0064 = 12500Hence the capital is Rs 12,500