The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 5% per annum is Rs 45. The sum is ________.
- ARs 36000
- BRs 72000
- CRs 18000
- DRs 54000
Solution & Step-by-step Explanation
The formula for the difference (D) between Compound Interest (CI) and Simple Interest (SI) for 2 years is given by:
D=P(
100
R
)
2
Where:
D=Rs 45
R=5%
P=Principal sum
Substitute the given values into the formula:
45=P(
100
5
)
2
45=P(
20
1
)
2
45=P×
400
1
P=45×400=18000
Thus, the sum is Rs 18,000.
D=P(
100
R
)
2
Where:
D=Rs 45
R=5%
P=Principal sum
Substitute the given values into the formula:
45=P(
100
5
)
2
45=P(
20
1
)
2
45=P×
400
1
P=45×400=18000
Thus, the sum is Rs 18,000.