The difference between the compound interest (compounded yearly) and the simple interest for 2 years on a certain sum at 5% per annum is Rs. 25. The sum is:
- ARs. 25,000
- BRs. 12,500
- CRs. 10,000
- DRs. 15,000
Solution & Step-by-step Explanation
The formula for the difference (D) between compound interest and simple interest for 2 years is given by:
D=P(
100
R
)
2
Where:
D=Rs. 25
R=5%
P = Principal amount (Sum)
Substitute the values into the formula:
25=P(
100
5
)
2
25=P(
20
1
)
2
25=P×
400
1
P=25×400=Rs. 10,000
D=P(
100
R
)
2
Where:
D=Rs. 25
R=5%
P = Principal amount (Sum)
Substitute the values into the formula:
25=P(
100
5
)
2
25=P(
20
1
)
2
25=P×
400
1
P=25×400=Rs. 10,000