The difference between compound interest and simple interest of same amount of money for two years at 9% per annum is rs.129.60. The sum of money is –
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Let the rate of principal amount=P
Amount after 2 years when interest is compounded
Then CI =P[{(1+R/100)^T} -1)= P(1+9/100)^2 = P[(1.09)^2 -1] = P [1.188-1] = P(0.188)
and Simple Interest = (P*R*T)/100=(P*9*2)100 = 0.18P
Difference between compound interest and simple interest = Rs.129.60
P(0.188) - 0.18P =129.60
P[ 0.188-0.18] =129.60
P [ 0.008] =129.60
P = 129.60/0.008
P= Rs 16200
Amount after 2 years when interest is compounded
Then CI =P[{(1+R/100)^T} -1)= P(1+9/100)^2 = P[(1.09)^2 -1] = P [1.188-1] = P(0.188)
and Simple Interest = (P*R*T)/100=(P*9*2)100 = 0.18P
Difference between compound interest and simple interest = Rs.129.60
P(0.188) - 0.18P =129.60
P[ 0.188-0.18] =129.60
P [ 0.008] =129.60
P = 129.60/0.008
P= Rs 16200
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