Question

The difference between simple interest and compound interest on a certain sum of money for 2 years at 4% per annum is rs.20. Then the sum equals?

Answer 1

let assume amount is x.

for 1.5 years simple interest =amount*interest rate*time/100= x*12*1.5/100=0.18x

for compound interest

after 1 year total amount (including principle and interest) = x* (1+ interest reate/100)

= x*(1+12/100)=x*(1+0.12)=1.12x

after next 6 month, total amount= 1.12x * (1+ interest rate for six month/100)

=1.12x* (1+6/100)= 1.12x*(1+0.06)=1.12x*1.06= 1.1872x

total compound interest = 1.1872x-x=0.1872x

difference on compound interest and simple interest = 0.1872x-0.18x

150= 0.0072x

x= 150/0.0072=20833.33

amount = 20833.33

906 Views · View Upvoters

Upvote · 2

 

Comment...



Ankit Dhayal, studied at Resonance IIT JEE Institute ®

Answered Oct 1, 2017

Continue Reading



318 Views

Upvote

 

Comment...

By Quora for Business

 

A great advertising solution to get high quality customers.

Promote your business on Quora - it's where people look for reliable information about your industry.

Start Now



Parameswaran V

Answered Mar 13, 2017

Assume, principal is RS.1000. Calculate both interest for this amount. Find the difference. This difference is for a principal of RS.1000. Hence, for 150 find the principal.

670 Views ·