The difference between Compound Interest, compounded half-yearly and Simple Interest for two years on a certain sum at 10% rate is Rs.124.05. Find the sum.
Solution
Simple Interest for ₹ 100 for 2+ years @ 10% interest = PNR/100
=₹ 100 x 2 x 10/100= ₹20.
Compound interest for ₹ 100 for 2- years @ 10% interest compounded every 6- months
=₹100 (1.05)⁴ - 100 =₹ 21.550625
So difference in the compound interest and Simple Interest= ₹(21.550625- 20) =₹1.550625
Therefore if the difference is ₹1.550625 the principal is= ₹100.
If the difference is ₹124.05 the Principal = 124.05/1.550625 x100
