Question
The difference between the interest payable on a sum
invested for three years at 20% compound interest per annum compounded annually and 20% simple interest per annum for the same period is ₹320. What is the value of the sum invested?Solution
Let the sum invested be Rs. P. According to the question, (P (1 + 20/100)3 - P} - {(P x 20 x 3) / 100} = 320 0.728P- 0.6P = 320 P=448 / 0.128 P = 2500 The value of the sum invested is Rs. 2500.
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