Question 107

The difference between the interest earned on the same amount invested under compound interest and simple interest at same rate of interest for 2 years is Rs. 60. If the rate of interest is 4% p.a. find the amount invested. (in Rs.)

Solution

Rate of interest = 4% and time period = 2 years

Let principal sum = Rs. $$P$$

Also, difference between compound interest and simple interest for 2 years = $$P(\frac{r}{100})^2$$

=> $$P(\frac{4}{100})^2=60$$

=> $$P=60\times\frac{10000}{16}$$

=> $$P=60\times625Rs.$$ $$37,500$$

=> Ans - (A)

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