Question

. What is the principal amount on which the difference between the compound interest and simple interest is Rs. 40, after two years at the rate of annual interest 5%?

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Answer 1

Step-by-step explanation:

p = Principal; n= Years; r= Rate of Interest

n here is 2 years and r is 20% per annum

Simple Interest (S) = (p*n*r)/100 = (p*2*20)/100 = 40p/100 = 0.4p

Compound Interest (C) = [p*(1+(r/100)^n)] -p = [p*(1+0.2)^2]-p = 1.44p - p = 0.44p

0.44p = 0.4p+96 ===> 0.04p = 96.00 ===> p = 96.00/0.04 = 2400

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