Question 61

The difference between the simple interest and compound interest on a principal at the rate 5% per annum for 2 years is ₹25. What is the principal?

Solution

The difference between the simple interest and compound interest on a principal for 2 years = $$P(\frac{r^2}{100^2})$$

Using the above formula ,

25 = $$P \frac{5^2}{100^2}$$

P = 10000

So , the answer would be option a)₹10000

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