Numerical answer
The difference between the compound interest and the simple interest on a certain sum of money for 2 years at 8% per annum is ₹128. Find the sum (in ₹).
Show answer and solution
Answer: 20000
For 2 years, CI − SI = P×(r/100)². Here the difference is ₹128 and r = 8%, so 128 = P×(0.08)² = P×0.0064. Solving, P = 128/0.0064 = ₹20,000. Shortcut: memorize CI − SI (2 yr) = P(r/100)² — it comes from the extra interest earned on the first year's interest in the second year, which is exactly (P×r/100)×r/100.
Saved on this device. Sign in or create a free account to keep it on every device.