On what sum of money will the difference between the simple interest and compound Interest for 2 years at 5% per annumbe equal to Rs. 50 ?
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Answer:
The difference between the Compound Interest and Simple Interest for a Principal of 'P' and rate of interest “I" is given by the formula
C.I- S.I for 2- years= P(I/100)²
here P= ?
Rate of interest I= 5%
C.I -S.I = Rs 50
So 50= P (5/100)²
So P= 50/(5/100)²
Principal = Rs 20,000
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Step-by-step explanation:
For ,
For ,N=2years
For ,N=2yearsR=5 %
For ,N=2yearsR=5 % We have S.I.= 100PNR = 100/P×2×5 = 100/10P=0.1P
And on interest being compounded for 2 years
and R=5 %, Amount=P(1+ 100R)N=P(1+ 100/5 )
2=P×(1.05 ² )=1.1025P
So, C.I.=A−P=1.1025P−P=0.1025P
Given, C.I.−S.I=Rs50
=>0.1025P−0.1P=Rs50
=>0.0025P=Rs50
=>P=Rs20,000
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