The difference between the compound interest(compounded annually) and simple interest on a sum at the rate of 30% per annum for 2 years is Rs 3600. What is the sum?
Answer & explanation
Correct answer: option 2
Let the rate of interest = r = 30% (given)
The formula used: (CI - SI) for 2 years = P × \(\frac{r^2}{100^2}\)(r2)1002
Here, Principal = P, CI - SI = 3600
Therefore,
⇒ 3600 = P × \(\frac{30^2}{100^2}\)(r2)1002
⇒ 3600 = P × \(\frac{900}{10000}\)(r2)1002
⇒ P = Rs.40,000