Question

On what sum of money will the difference between simple interest and compound interest for 2 years at 5% per annum be equal to Rs 50?

Answer 1

For ,
$N=2years$
$R=5$ %
We have $S.I.=\frac{PNR}{100}=\frac{P\times 2\times 5}{100}=\frac{10P}{100}=0.1P$
And on interest being compounded for $2$ years and $R=5$ %, $Amount=P{(1+\frac{R}{100})}^N=P{(1+\frac{5}{100})}^2=P\times \left({1.05}^2\right)=1.1025P$
So, $C.I.=A-P=1.1025P-P=0.1025P$
Given, $C.I.-S.I=Rs50$
$=>0.1025P-0.1P=Rs50$
$=>0.0025P=Rs50$
$=>P=Rs20,000$