Question
Suresh earned an interest of Rs. 1290 on principal
amount of Rs. 4000 at some rate of compound interest in 2 years. How much more/less interest would he have earned on Rs. 4450 at the same rate of simple interest for the same duration?Solution
Let, rate of interest be ‘r’% per annum So, 1290 = 4000 × {(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 = 4450 × 0.15 × 2 = Rs. 1335 Required amount = 1335 – 1290 = Rs. 45
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