Question

The compound interest on a certain sum of money for 2 years at 10% per annum is rs.430.the simple interest on the same sum at the same rate and for the same time will be

Answer 1

Compound interest :

P(1 + i)ⁿ = Amount

Amount = P + 430

P(1.10)² = 1.21P

1.21P = P + 430

1.21P - P = 430

0.21P = 430

P = 2047.62

Simple interest :

Principle × rate × time

2047. 62 × 0.1 × 2 = 409.524