Question:
The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs.) is:
[A].625
630
640
650
The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs.) is:
[A].
[B].
[C].
[D].
Answer: Option A
Explanation:
Let the sum be Rs. x. Then,
| C.I. = | x | 1 + | 4 | 2 | – x | = | 676 | x | – x | = | 51 | x. | ||||||
| 100 | 625 | 625 |
| S.I. = | x x 4 x 2 | = | 2x | . | ||
| 100 | 25 |
| 51x | – | 2x | = 1 | |
| 625 | 25 |
x = 625.