Question

the difference between compound interest and simple interest on a certain sum of money for 2 years at 10%p.a. is 25. find the sum​

Answer 1

Given that,

• Difference between CI and SI = 25
• Time = 2 years
• Rate of interest = 10%
• Principle = ?

we know,

• Formula for difference between CI and SI =

$\frac{p \times {r}^{2} }{ {100}^{2} </strong><strong>}</strong><strong>$

$25 = \frac{p \times {(10)}^{2} }{ {(100)}^{2} } \\ p \: = \frac{25 \times {(100)}^{2} }{ {(10)}^{2} } \\ p = \frac{250000}{100} \\ p = 2500$

Therefore, the sum (or) principle is 2500.

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(The given formula only works when the time period is 2 years)