Question

The simple interest on a sum of money in 2 years is Rs 36 less than the compound interest compounded annually. If the rate of interest is 12 % p.a., find the sum.​

Answer 1

Answer:   Rs 2500

======================================================

Explanation:

Compute the simple interest on a deposit of x

The per annum (p.a.) interest rate is r = 0.12 from the 12% value mentioned.

We do so over t = 2 years

i = p*r*t

i = x*0.12*2

i = 0.24x

Let A = 0.24x

Do the same for the compound interest. We'll have n = 1 to reflect annual compounding.

i = p*(1+r/n)^(n*t) - p

i = x*(1+0.12/1)^(1*2) - x

i = 1.2544x - x

i = 0.2544x

Let B = 0.2544x

We're told that "The simple interest on a sum of money in 2 years is Rs 36 less than the compound interest compounded annually"

This means the interest earned in the simple interest (value A) is Rs 36 less than the amount earned with quantity B

So,

A = B-36

0.24x = 0.2544x - 36

0.24x - 0.2544x = -36

-0.0144x = -36

x = -36/(-0.0144)

x = 2500

The amount invested or deposited is Rs 2500