Question

The diffrence between CI and SI on a sum of 2 years at 8 percent per annum is Rs 160.If the interest were compounded half yearly. what will be the diffrence in interest in 2 years

Answer 1

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For first year, S.I. = C.I.

Now, Rs. 16 is the S.I. on S.I. for 1 year.

∴ Rs. 10 is S.I. on Rs. 100

∴ Rs. 16 is S.I. on (100/10×16) = Rs.160

∴ S.I. on principal for 1 year at 10% is Rs. 160.

∴ principal = ( 100 × 160/10 ×1 ) = Rs.1600.

Amount for 2 years compounded half yearly

= Rs.[ 1600×( 1+5/1005)⁴ ] = Rs.1944.81

∴C.I.Rs. ( 1944.81−1600 ) = Rs.344.81

S.I. = Rs.( 1600×10×2/ 100 ) = Rs.320

∴(C.I.)−(S.I.) = Rs.(344.81−320) = Rs.24.81