Question

the difference between simple interest and compound interest rate 10% for 2 years on an amount is rupees 20 find the principal value​

Answer 1

Step-by-step explanation:

Question:

The difference between compound interest and simple interest is Rs 96 at 20% per annum for two years. How do I calculate the principal amount?

ans:

Assume the following:

p = Principal; n= Years; r= Rate of Interest

n here is 2 years and r is 20% per annum

Simple Interest (S) = (p*n*r)/100 = (p*2*20)/100 = 40p/100 = 0.4p

Compound Interest (C) = [p*(1+(r/100)^n)] -p = [p*(1+0.2)^2]-p = 1.44p - p = 0.44p

0.44p = 0.4p+96 ===> 0.04p = 96.00 ===> p = 96.00/0.04 = 2400