Question

On what sum of money will the difference between the simple and compound interest for 2 years at the rate of interest of 5% per annum compounded annually be equal to 25?​

Answer 1

Answer:

Let the principal be Rs. P

Given : R=5%,T=24 years

C.I. for 2 years =P(1+ 100/5)^2 −P

S.I. for 2 years = 100/P×5×2 = P/10

∵ Difference between C.I. and S.P. = Rs. 25

P(1+ 5/100 )^2 -P-P /10=25

441p/ 400-11p/ 10=25

441P−440P/ 400 =25

P=10,000

Hence, the principle should be Rs. 10,000