Question

The different between simple and compound interest. on a certain sum of money for 2years at 4percent per annum,is $1.The sum of money is​

Answer 1

ANSWER

The difference between the simple interset and compound interest on a certain sum of money 'P' for 2 years at r% per annum is given by :

⇒(CI−SI) 2year = Pr^2/100^2

(CI−SI)

2year

Using the above formula for a sum of money 'P' invested for two years at 4% p.a., given that the difference between CI&SI is Rs.20

P(4) 2⇒20=

100×100

P(4×4)⇒5×25×100=P

⇒P=Rs.12500

Hence, the answer is Rs.12500.