Question

The difference between the compound interest and simple interest on a sum of money for 1.5 years at 12% per annum is 150 rs. Calculate the amount.

Answer 1

The difference of 150 is solely due to interest on interest in the second year. This represents 12% simple interest on interest received for first year for 6 months (or 6% in effect).

Therefore, interest for the first year is :

150/6 x 100 = 2500

Now, 2500 must be 12% of the principal amount at the beginning of first year.

Therefore, principal at the beginning of first year is :

P = 2500/12 x 100 = 20833.33

This method is adopted to crack management entrance examinations where time is at premium and application of traditional formulae consumes more time than you can afford to spend. A second look reveal both steps could be combined together and the answer pops into your mind without much ado …

{(150/6 x 100)/12} x 100 = 20833.33

Cheers!!!

Answer 2

hiii friend
here is your answer
$difference \: between \: si \: and \: ci = p \times { ( \frac{r}{100} ) }^{2} \\ \\ 150 = p \times \frac{144}{10000} \\ p = 10416.66$
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