The difference between the simple interest on a certain sum at the rate of 10 per annum for 2 years ...........

Quantitative Aptitude ( CCS) Compound Interest

The difference between the simple interest on a certain sum at the rate of 10%per annum for 2 years and compound interest which is compounded every 6 months is Rs.124.05. what is the principal sum

Rs.5000

Rs.6000

Rs.7000

Rs.8000

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Explanation:

Compound Interest on P at 10% for 2 years when interest is compounded half-yearly
=P(1+R2/100/)2T−P=P(1+1/20)4−P=P(21/20)4−P
Simple Interest on P at 10% for 2 years = PRT/100=P×10×2/100=P5
Given that difference between compound interest and simple interest = 124.05
P*(21/20)4−P−P5=124.05
=>P[(21/20)4−1−15]=124.05
P=8000