The difference between the compound interest and simple interest on certain sum at 10% per annum for 2 years is Rs. 631. What is the sum?A) 63100B) 56000C) 58000D) 42160
Question
The difference between the compound interest and simple interest on certain sum at 10% per annum for 2 years is Rs. 631. What is the sum?A) 63100B) 56000C) 58000D) 42160
Solution
The difference between compound interest and simple interest for 2 years is given by the formula:
P*(r/100)^2
Where: P is the principal amount (the sum we are trying to find) r is the rate of interest
Given in the problem: r = 10% Difference = Rs. 631
Substituting these values into the formula:
631 = P*(10/100)^2 631 = P*(0.1)^2 631 = P*0.01
Solving for P:
P = 631 / 0.01 P = Rs. 63100
So, the sum is Rs. 63100. Therefore, the correct answer is A) 63100.
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