The difference between the compound interest and simple interest on a certain sum of money for 2 years at 10% per annum is Rs 15. find the sum of money
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CI = P[1+r/100]^n-P
SI = pnr/100
From the problem,
R = 10%
N = 2
CI – SI = 15
We need to find p.
CI – SI = P[1+r/100]^n-P-Pnr/100
=P[(1+r/100)^n-1-nr/100]
Substituting the values of n and r, we get
CI – SI = 15 = P[1+10/100)^2-1-20/100]
Let us consider the expression within the square brackets.
Expanding and subtracting the remaining values, we get
1+20/100+100/10000-1-20/100 = 100/10000 = 1/100
Therefore, 15 = P * 1/100 or P = 15*100 = Rs. 1500.
Thus, the principal amount is Rs. 1,500.
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