Question

Find the sum on which the difference between the simple interest and the compound interest at the rate of 8% per annum compounded annually be Rs. 64 in 2 years.

Answer 1

Let Rs.x be the sum.

$Interest=x\times 8\times \frac{1}{100}=1.08\times x$

Compound interest

For 1^st year:

P = Rs.x, R = 8% and T=1

$Interest=x\times 8\times \frac{1}{100}=1.08\times x$

For 2^nd year:

P = Rs.x+Rs.0.08x = Rs.1.08x

$Interest=1.08\times 8\times \frac{1}{100}$

The difference between the simple interest and compound interest at the rate of 8% per annum compounded annually should be Rs.64 in 2 years.

⇒Rs.0.08x - Rs.0.0864x = Rs.64

⇒Rs.0.0064x = Rs.64

⇒x = Rs.10000

Hence the sum is Rs.10000.