The difference in simple interest and compound interest on a certain sum of money in 2 years at 3% per annum is 90 paisa. What is the sum?
Answer & explanation
Correct answer: option 4
The formula used here is,
Difference in the simple interest and compound interest on a certain sum at R% per annum in 2 years = (CI - SI) = $\frac{PR^2}{100^2}$
⇒ Difference in the simple interest and compound interest on a certain sum at 3% per annum in 2 years = 90paisa or 0.9
⇒ 0.9 = $\frac{P3^2}{100^2}$
⇒ 9P = 0.9 x 10000
⇒ P = 1000
Thus, the sum is Rs 1000