Question

Q. The difference between the compound interest and the simple interest on a certain principal for 2years at 4% per annum is Rs 250. Find the principal amount.​

Answer 1

Answer:

Let SM denotes the required sum of money.

Hence from above data we get following relation,

SM*(1 + 4/100)^2 - SM - SM*2*4/100 = 20

or SM*[(26/25)^2 - 1 - 2/25] = 20

or SM*[(26/25)^2 - 27/25] = 20

or SM*(1/625) = 20

or SM = 20*625 = 12,500