The difference between compound and simple interest on a sum of money deposited for 2 years at 5% per annum is Rs12. Find the sum of money

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Solution

For ,
$N = 2 y e a r s$
$R = 5$ %
We have $S . I . = \frac{P N R}{100} = \frac{P \times 2 \times 5}{100} = \frac{10 P}{100} = 0.1 P$
And on interest being compounded for $2$ years and $R = 5$ %, $A m o u n t = P {(1 + \frac{R}{100})}^{N} = P {(1 + \frac{5}{100})}^{2} = P \times ({1.05}^{2}) = 1.1025 P$
So, $C . I . = A - P = 1.1025 P - P = 0.1025 P$
Given, $C . I . - S . I = R s 12$
$=> 0.1025 P - 0.1 P = R s 12$
$=> 0.0025 P = R s 12$
$=> P = R s 4, 800$

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The difference between compound and simple interest on a sum of money deposited for 2 years at 5% per annum is Rs12. Find the sum of money

For , N=2years R=5 % We have S.I.=PNR100=P×2×5100=10P100=0.1P And on interest being compounded for 2 years and R=5 %, Amount=P(1+R100)N=P(1+5100)2=P×(1.052)=1.1025P So, C.I.=A−P=1.1025P−P=0.1025P Given, C.I.−S.I=Rs12 =>0.1025P−0.1P=Rs12 =>0.0025P=Rs12 =>P=Rs4,800