The difference between the compound interest and simple interest on a certain…
2024
The difference between the compound interest and simple interest on a certain sum for 2 years at 6% per annum is Rs 90. Find the sum?
- A.
25000
- B.
28000
- C.
29000
- D.
30000
Attempted by 5 students.
Show answer & explanation
Correct answer: A
Let the principal be P. Rate = 6% per annum, time = 2 years.
Simple interest for 2 years = P × 6% × 2 = 0.12P.
Compound interest for 2 years = P[(1 + 0.06)^2 − 1] = P(1.1236 − 1) = 0.1236P.
Difference between compound and simple interest = 0.1236P − 0.12P = 0.0036P.
Given this difference equals Rs 90, so 0.0036P = 90 ⇒ P = 90 / 0.0036 = 25000.
Answer: Rs 25000.