Question

on what sum of money will the difference between the simple interest and the compound interest for 2 years at 5% p.a be equal to rs 50?

Answer 1

Answer:

Rs 20000

Step-by-step explanation:

Two different approach to solve this

As Sum of money & Interest rate are same

Difference in Interest for 2 years in SI & CI

is because of additional interest on interest Earned in First Year

50 = Interest Earned in first Year * 5 * 1 / 100

=> Interest earned in First Year = 1000

Interest earned in first Year = Sum of Money * 5  * 1 /100

=> 1000 = Sum of Money * 5  * 1 /100

=> Sum of Money = 20000 Rs

Second Approach

Simple Interest in 2 years  = P * 5 * 2 /100 = 0.1P

Compound interest in 2 years = P(1 + 5/100)² - P = 0.1025P

Difference = 0.1025P - 0.1P = 50

=> 0.0025P = 50

=> P = 20000 Rs