Question

The difference between the compound interest and simple interest of some amount of money for 2 years at 9% per annum is rs.129.60.the sum of money is

Answer 1

Let the rate of principal amount=P
Amount after 2 years when interest is compounded
Then CI =P[{(1+R/100)^T} -1)= P(1+9/100)^2 = P[(1.09)^2 -1] = P [1.188-1] = P(0.188)

and Simple Interest = (P*R*T)/100=(P*9*2)100 = 0.18P

Difference between compound interest and simple interest = Rs.129.60

P(0.188) - 0.18P =129.60

P[ 0.188-0.18] =129.60

P [ 0.008] =129.60

P = 129.60/0.008

P= Rs 16200