Maths-

General

Easy

Question

# On what sum of money will the difference between the compound interest and simple interest for 2years be equal to Rs 25 if the rate of interest charged for both is 5% p.a.

Hint:

### Use the formula of compound interest and simple interest to get the principal amount.

## The correct answer is: Rs 10000

### Complete step by step solution:

Let the principal amount = P

It is given that the rate of interest R = 5% and number of years T = 2 years.

So, compound interest for 2 years =

Simple interest for 2 years =

It is given that compound interest - simple interest = 25 Rupees

That is,

Rupees.

Hence the principal amount = Rs 10000

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