The difference between the compound interest and the simple interest on a certain sum at 10% per annum for 2 years is ₹1,200. Find the sum.
- A₹1,20,000
- B₹2,70,000
- C₹2,00,000
- D₹1,50,000
Solution & Step-by-step Explanation
The standard formula for the difference between Compound Interest (CI) and Simple Interest (SI) for a period of 2 years is:
CI−SI=P(
100
R
)
2
Where:
P = Principal sum
R = Rate of interest per annum = 10%
CI−SI = ₹1,200
Substitute the values into the formula:
1200=P(
100
10
)
2
1200=P(
10
1
)
2
1200=P×
100
1
P=1200×100=₹1,20,000
Thus, the sum is ₹1,20,000.
CI−SI=P(
100
R
)
2
Where:
P = Principal sum
R = Rate of interest per annum = 10%
CI−SI = ₹1,200
Substitute the values into the formula:
1200=P(
100
10
)
2
1200=P(
10
1
)
2
1200=P×
100
1
P=1200×100=₹1,20,000
Thus, the sum is ₹1,20,000.