Question
A particular sum of money, when
invested at a simple interest rate, yields Rs. 3,000 as interest after 2 years. The same sum, when invested at compound interest (compounded annually) for the same period and at the same rate, yields Rs. 3,300 as interest. What is the principal sum?Solution
ATQ, SI received for 1 year = (3000/2) = Rs. 1,500 Difference between CI and SI for 2 years = 3300 - 3000 = Rs. 300 This means Rs. 300 is the interest received on Rs. 1,500 Therefore, rate of interest = (300/1500) = 20% Let the sum invested be Rs. 'P' Now, since SI received for 1 year is Rs. 1500 Therefore, (P × 0.2 × 1) = 1500 Or, 'P' = (1500/0.2) = 7500 Therefore, sum invested = Rs 7,500
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