The difference between the compound interest and simple interest on a certain amount of money for 2 years at 10% is Rs. 4. The amount (in rupees) is:
Question
The difference between the compound interest and simple interest on a certain amount of money for 2 years at 10% is Rs. 4. The amount (in rupees) is:
Solution
The difference between compound interest and simple interest for 2 years is given by the formula:
P*(R/100)^2
Where: P = Principal amount R = Rate of interest
Given in the problem: R = 10% Difference = Rs. 4
Substituting these values into the formula, we get:
P*(10/100)^2 = 4 P*(1/10)^2 = 4 P*(1/100) = 4 P = 4 * 100 P = Rs. 400
So, the principal amount (P) is Rs. 400.
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