Question 120

If the compound interest on a certain sum for two years at 12% per annum is 2,544, the simple interest on it at the same rate for 2 years will be

Solution

Let the Rate of Interest be R and Principal Amount be Rs P

So, R = 12%

Time Period (T) = 2 years

Compound Interest = P$$(1 + \frac{R}{100})^T$$ - P

2544 = P$$(1 + \frac{12}{100})^2$$ - P

P = Rs 10000

Now SI with same rate of interest = $$\frac{P \times R \times T}{100}$$ = $$\frac{10000 \times 12 \times 2}{100}$$ = Rs 2400

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