Question

The difference between SI and CI on a sum of money at the rate of 5% per annum for two years is 25. What is the principal? (a) * 1000 (b) * 10,000 (C) 5000 (d) 2500​

Answer 1

Answer:

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Explanation:

The difference between simple interest and compound interest is Rs. 25 . So according to formula,Simple interest is

=>I=(P×R×T)/(100)

=>P=(I×100)/(R×T)

Compound interest formula

=> FV = P×(1+R/100})^T

Here FV = P + Total Interest

=> I = P×(1×R/100)^T -P

So by equating condition mentioned in question where R=5% and T=2 years and difference is 25

=>(P×R×T)/100+25=P×(1+R/100)T−P

=>(P×5×2)/100+25=P×(1+5/100)2−P

=>(10P+2500)/100=P∗(1.05)2−P

=>(10P+2500)/100=0.1025P

=>(10P+2500)=10 . 25P

=>0.25P=2500

=>P=2500/0.25

=>10000

Hopes that answers your question.

Edit: made mistake in calculation when multiplying 0.1025 with 100, corrected