Question

The compound interest on a certain sum of money at 4% per annum for 2 years is Rs.306. Calculate the simple interest on the same sum for 5 years and 7% per annum.

Answer 1

Dear Student,
$$\begin{gathered} \mathrm{CI}\hspace{0.17em}=\mathrm{A}-\mathrm{P}=\mathrm{P}\left[{\left(1+\frac{\mathrm{r}}{100}\right)}^{\mathrm{n}}-1\right] \\ 306=\mathrm{P}\left[{\left(1+\frac{4}{100}\right)}^2-1\right]=\mathrm{P}\left[\frac{{26}^2}{{25}^2}-1\right] \\ \mathrm{P}\left[\frac{{26}^2-{25}^2}{{25}^2}\right]=306 \\ \mathrm{P}\left[\frac{1\times 51}{625}\right]=306\Rightarrow \mathrm{P}=\frac{306\times 625}{51}=3750 \\ \mathrm{SI}\hspace{0.17em}=\frac{\mathrm{Prt}}{100}=\frac{3750\times 7\times 5}{100}=\mathrm{Rs}.1312.5 \end{gathered}$$
Regards