Question

The difference between simple interest and compound interest on a certain sum for 2 years

Answer 1

let the sum be P = Rs. 100.

time T = 2 years, rate of interest R = 6% per annum

simple interest = PRT/100= 100*6*2/100=

Rs 12

compound amount= P( 1+R/ 100)^T

= 100*(1+6/100) ^2

= 112.36

therefore the compound interest = compound amount - principal

=112.36-100=12.36/-

the difference between the compound interest and simple interest = 12.36-12.00 = 0.36/-

if the difference between the CI and SI is Rs. 0.36 the principal = Rs. 100

if the difference between the CI and SI is Rs. 90 the principal = 100/0.36*90

= 25000

thus the sum is Rs. 25000.

hope this helps you.