The difference between the compound interest on certain sum of money at 10% p.a for 2 years is rupees 500 . Find the sum when the interest is compounded annually .
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Answer:
Step-by-step explanation:
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+
100
10
)
2
⎦
⎥
⎤
=Rs.
⎣
⎢
⎡
100×(
2
11
)
2
⎦
⎥
⎤
=Rs.121
Computation of simple interest:
Prinicpal =Rs.100
R=10% and Time =2 years.
∴S.I.=Rs.(
100
100×10×2
)=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
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