Question

The simple interest on a certain sum of money invested at a certain rate for 2 years amounts to Rs. 1200. The compound interest on the same sum of money invested at the same rate of interest for 2 years amounts to Rs. 1290. What was the principal?

• A. 12000
• B. 16000
• C. 6000
• D. 4000

Answer 1

Answer:

D. 4000

SI for 2years is Rs.1200

$SI=\frac{PRN}{100}$

$SI=\frac{PR\times2}{100}=1200$

$PR=60000$

CI for 2years is Rs. 1290

$CI=P(1+\frac{R}{100})^2-P=1290$

Substitue the value of PR,

$1290=\frac{60000}{R}[\frac{(100+R)^2}{100^2}-1$]

We get, R= 15 %

$P=\frac{60000}{15}$

$P=4000$