Question

The difference between the compound interest and the simple interest on a certain sum for 2 years the rate of 10% per annum is 500. Find the sum​

Answer 1

Let the sum be Rs.100

Computation of compound interest:

Prinicpal =Rs.100

R=10% per annum and n=2 years.

Amount=Rs.⎣⎢⎡100×(1+10010)2⎦⎥⎤

                =Rs.⎣⎢⎡100×(211)2⎦⎥⎤=Rs.121

Computation of simple interest:

Prinicpal =Rs.100

R=10% and Time =2 years.

∴S.I.=Rs.(100100×10×2)=Rs.20

Thus, difference in C.I. and S.I.=Rs.(21−20)=Re.1

Now, if difference between C.I and S.I. is Re.1,    Then Sum =Rs.100

If difference between C.I. and S.I. is Rs.500,    Then Sum =Rs.(100×500)=Rs.50000