Question

Please help to solve this
2. The difference between the compound interest, compounded annually and the simple interest on a certain sum for 2 years at 6% per annum is $ 18. Find the sum.

Answer 1

Answer:

5,000

Step-by-step explanation:

Principle = p = ?

Rate of interest = i = 6%

Time = n =  2 yrs

Difference = 18 [ CI - SI ]

→ $\bold{\blue{\boxed{p[(1+i)^n-1] - p * i * t = 18}}}$

→ $\bold{p[(1+0.06)^2-1] - p * 0.06 * 2 = 18}$

→ $\bold{p[(1.06)^2-1] - p * 0.12 = 18}$

→ $\bold{p(0.1236) - p(0.12) = 18}$

→ $\bold{(0.0036)p = 18}$

$\bold{\blue{\boxed{P = 5,000}}}$

Thus the Principle amount is 5,000