On a certain sum of money lent out at 16% per annum, the difference between the compound interest for 1 year, payable halfyearly, and the simple interest for 1 year is Rs. 60. The sum is:
Answer & explanation
Correct answer: option 4
Simple interest of 1 year = 16%
Rate when interest compounded half yearly = \(\frac{16 }{2}\) = 8%
For 1 years ( compounded half yearly ) , n = 2
Rate of compound interest for 1 year when rate is compounded half yearly
= 8 + 8 + \(\frac{8 × 8 }{100}\)
= 16 + 0.64
= 16.64%
Difference b/w CI and SI = 16.64 - 16 = 0.64%
ATQ,
0.64% = 60
1% = \(\frac{60 }{0.64}\) = 93.75
The sum invested = 100% = 100 ×93.75 = Rs. 9375