Question
If the difference between compound interest (compounded
annually) and simple interest earned in two years at 15% p.a., is Rs. 450, then find the sum invested.Solution
Let the sum invested be Rs. 'P' Simple interest earned = {(P × 15 × 2)/100} = Rs. '0.3P' Compound interest = P × [{1 + (15/100)}² – 1] = Rs. '0.3225P' ATQ; 0.3225P – 0.3P = 450 Or, 0.0225P = 450 So, P = 20,000
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