Question 55

The difference between the compound interest and simple interest on ₹x at 12% per annum for 2 years is ₹18. What is the value of x?

Solution

Compound interest and Simple interest earned in first year would be same , i.e $$\frac{12x}{100}$$

Difference between them in second year would be interest earned on the interest of first year

$$\frac{12}{100}$$ $$\times$$ $$\frac{12x}{100}$$ = $$\frac{144x}{100 ^ 2}$$ = 18

x = 18 $$\times$$ $$\frac{100^2}{144}$$ = 1250

So, the answer would be option a)1250.

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