Question 97

If the difference between the simple interest and compound interest for two years on a certain sum at the rate of 10% per annum when compounded half yearly is Rs. 124.05 then the sum is (in Rs.)

Solution

Let say Amount is P.

Compound interest

$$=P(1+r/n)^nt -P $$

and

Simple interest

$$=Pnr.$$

So,CI$$=P(1+0.10/2)^4-P=0.21550625P$$.

And SI$$=P×2×0.10=0.2P$$.

So,$$0.21550625P-0.2P=124.05$$

or,$$P=8000.$$

So,A is correct choice.

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