Question

The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Rs 1. Find the sum.

Answer 1

Answer:

Rs. 625

Step-by-step explanation:

Let the sum be Rs. P

R = 4 %

T = 2 years

SI = (P×R×T) / 100 ⇒  (P×4×2) / 100 ⇒ 2P / 25

CI = P((1+R/100)² - 1) ⇒ P ((1+4/100)² -1) ⇒ P((1+1/25)²-1) ⇒ P((26/25)²-1)

   ⇒ P((676/625)-1) ⇒ P(51/625) ⇒ 51P/625

Now, CI - SI = 1

⇒ 51P/625 - 2P / 25 = 1

⇒ 51P - 50P/625 = 1

⇒P/625 = 1

∴ P = ₹ 625