Question
Suresh earned an interest of Rs. 1419 on principal
amount of Rs. 4400 at some rate of compound interest in 2 years. How much more/less interest would he have earned on Rs. 5000 at the same rate of simple interest for the same duration?Solution
Let, rate of interest be ‘r’% per annum So, 1419 = 4400 × {(1 + r/100)2 – 1} => 129/400 = {(1 + r/100)2 – 1} => 529/400 = (1 + r/100)2 => (23/20)2 = (1 + r/100)2 => (23/20) = (1 + r/100) => (3/20) = r/100 => r = 15 So, simple interest earned = 5000 × 0.15 × 2 = Rs. 1500 Required amount = 1500 – 1419 = Rs. 81
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