Question
The difference between compound interest and simple
interest at rate of 20% per annum for 2 years is Rs. 240. Find the simple interest obtained on same amount for a period of 2 years at rate of 10% per annum.Solution
Let, the amount be Rs. P. P[(1 + 20/100)2 – 1] – P × 20% × 2 = 240 P × 0.44 – P × 0.4 = 240 P × 0.004 = 240 P = 240 ÷ 0.004 = Rs. 6000 Therefore, required interest = 6000 × 10% × 2 = Rs. 1200
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