Question
If the difference between compound interest (compounded
annually) and simple interest earned in two years at 10% p.a., is Rs. 200, then find the sum invested.Solution
Let the sum invested be Rs. 'P' Simple interest earned = {(P × 10 × 2)/100} = Rs. '0.2P' Compound interest = P × [{1 + (10/100)}² – 1] = Rs. '0.21P' ATQ; 0.21P – 0.2P = 200 Or, 0.01P = 200 So, P = 20,000
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