Find the Simple Interest:

If the difference between the compound interest and simple interest on a sum of money at 5% per annum for 2 year is Rs 16. Find the simple interest.

  1.  Rs. 840
  2. Rs. 932
  3. Rs. 520
  4. Rs. 640
Monis Rasool Professor Asked on 12th September 2015 in Maths.
Add Comment
  • 1 Answer(s)

    Answer: (4) Rs. 640

    Explanation:-
    Let the principal be Rs. X.
    Given-
    Rate = 5%, Time = 2 years and the difference between C I and S I = Rs. 16

    Formula-
    Simple Interest = P x R x T/100
    Where, P = principal, R = rate, & T = time.

    Formula-
    Compound Interest = P [(1 + R/100)t – 1]
    Where, P = principal, R = rate, t = time.

    According to the question,
    Formula-
    Compound Interest = P [(1 + R/100)t – 1]
    Where, P = principal, R = rate, t = time.

    According to the question,
    X[(1 + 5/100)2 – 1] – X x 5 x 2/100 = 16
    X[(21/20)2 – 1 ] – X/10 = 16
    X[441/400 – 1] – X/10 = 16
    X[441 – 400]/400 – X/10 = 16
    X (41 – 40)/400 = 16
    X/400 = 16
    X = 16 x 400
    X = Rs. 6400

    Then,  Simple interest = 6400 x 5 x 2/100
    = 64 x 5 x 2
    = Rs. 640

    Then, the simple interest is Rs. 640.

    Hence, the answer is (4) Rs. 640.

    Anurag Mishra Professor Answered on 13th September 2015.
    Add Comment
  • Your Answer

    By posting your answer, you agree to the privacy policy and terms of service.