Aptitude - Compound Interest - Discussion
Discussion Forum : Compound Interest - General Questions (Q.No. 2)
2.
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:
Answer: Option
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.
Discussion:
149 comments Page 2 of 15.
Mukesh vijey said:
6 years ago
Where p=x, n=2, r-2.
c.i = (p(1+r/100)^n-1).
= (x+r/100)^n-x) (//multiply x inside)
= (x+2/100)^2-x)(//substitute n and r value)
= (676/625)x+x.
c.i = (51/625)x.
SI = pnr/100.
= xnr/100(//p=x).
= (x*2*4)/100.
SI = 2x/25.
Given that , s.i - c.i =1.
Therefore, 2x/25-(51x-625)=1.
x = 625.
Answer is 625.
c.i = (p(1+r/100)^n-1).
= (x+r/100)^n-x) (//multiply x inside)
= (x+2/100)^2-x)(//substitute n and r value)
= (676/625)x+x.
c.i = (51/625)x.
SI = pnr/100.
= xnr/100(//p=x).
= (x*2*4)/100.
SI = 2x/25.
Given that , s.i - c.i =1.
Therefore, 2x/25-(51x-625)=1.
x = 625.
Answer is 625.
Nitin Tiwari said:
2 years ago
C.I=A-P ------> (1).
So the amount is, A = P(1+R/100)^n.
Put the value of A in equation (1).
Where n = year = 2, r = rate = 4%,
C.I = P(1+4/100)^2-P,
= P(1+1/25)^2-P,
= P(26/25)^2- P.
Taking 'P' common.
= P[(26/25)^2-1].
= P[((26*26)-(25*25))/(25*25)].
= P[(676-625)/625],
= P[51/625].
So the amount is, A = P(1+R/100)^n.
Put the value of A in equation (1).
Where n = year = 2, r = rate = 4%,
C.I = P(1+4/100)^2-P,
= P(1+1/25)^2-P,
= P(26/25)^2- P.
Taking 'P' common.
= P[(26/25)^2-1].
= P[((26*26)-(25*25))/(25*25)].
= P[(676-625)/625],
= P[51/625].
(5)
Mahan Singh said:
9 years ago
Its very simple we put -x because the question is asking the difference between Interest but in compound interest formula we also put the principal value together to subtract that we will - x because x is principal value. We don't need principal value only we need interest difference.
Pankaj said:
9 years ago
Hi, one thing I could not understand. In question, it is given that the difference between simple and compound. Not difference between compound and simple. These two questions are distinct in the first, the answer will be in minus. So how can it possible? So please help me please.
Md.iftekhar said:
8 years ago
Hi, friends we can easily solve this problem with the help of this formula.
Formula :- Sum= Difference(100/r)^2.
Now put the value----- Sum= 1(100/4) ^2
= 1* 625/1
= 625 Ans.
Formula :- Sum= Difference(100/r)^2.
Now put the value----- Sum= 1(100/4) ^2
= 1* 625/1
= 625 Ans.
Tarakeswararao said:
1 decade ago
Hello friend this is Tarak.
Now we have formula for finding this type of problems.
i.e D = P*(R/100)^2 if the time is 2 years.
If time is 3 years now the formula is D = P*(R/100)^2*(3+(R/100)).
Where D = Difference.
P = Principle amount.
R = Interest.
Now we have formula for finding this type of problems.
i.e D = P*(R/100)^2 if the time is 2 years.
If time is 3 years now the formula is D = P*(R/100)^2*(3+(R/100)).
Where D = Difference.
P = Principle amount.
R = Interest.
Prasad Mandati said:
8 years ago
Note:
If,
P= Principal sum x= R/100.
Now,
The difference between Compound and simple interests when compounded annually for two years is Px^2.
Similarly if the same is done for 3 years the difference would be P(x^3 + 3x^2).
Hope it helps you!
If,
P= Principal sum x= R/100.
Now,
The difference between Compound and simple interests when compounded annually for two years is Px^2.
Similarly if the same is done for 3 years the difference would be P(x^3 + 3x^2).
Hope it helps you!
Ravi said:
1 decade ago
Let's 100.
Simple interest = 100*2*4/100 = 8.
Total amount = 108.
Now find CI = 100*4/100 = 4.
104*4/100 = 4.16.
total = 108.16.
SI - CI = 108-108.16 = .16
1*100/.16 = 625.
Simple interest = 100*2*4/100 = 8.
Total amount = 108.
Now find CI = 100*4/100 = 4.
104*4/100 = 4.16.
total = 108.16.
SI - CI = 108-108.16 = .16
1*100/.16 = 625.
Tarun.P said:
6 years ago
We have used -x because compound interest formula is Amount - principle.
And the formula for Amount is;
Amount=P (1+r/100) ^n.
First, we will calculate the amount later the total amount can be subtracted by the principle values!
And the formula for Amount is;
Amount=P (1+r/100) ^n.
First, we will calculate the amount later the total amount can be subtracted by the principle values!
Salman said:
10 years ago
Actually the question is wrong:
It should be difference between compound and simple interest.
Since compound interest will always be larger than simple interest given the same rate and period.
It should be difference between compound and simple interest.
Since compound interest will always be larger than simple interest given the same rate and period.
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