If the difference between the compound interest and simple interest on a certain

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What’s inside this PDF?

Question: If the difference between the compound interest and simple interest on a certain sum of money for 2 years at 10% is $50, what is the principal? (2000)

Options:

$1000
$1200
$1500
$2000

Correct Answer: $1500

Exam Year: 2000

Solution:

The difference between CI and SI for 2 years is given by P * (r^2)/100^2. Setting this equal to $50 and solving gives P = $1500.

If the difference between the compound interest and simple interest on a certain

Practice Questions

If the difference between the compound interest and simple interest on a certain sum of money for 2 years at 10% is $50, what is the principal? (2000)

$1000
$1200
$1500
$2000

Questions & Step-by-Step Solutions

If the difference between the compound interest and simple interest on a certain sum of money for 2 years at 10% is $50, what is the principal? (2000)

Step 1: Understand the problem. We need to find the principal amount (P) where the difference between compound interest (CI) and simple interest (SI) for 2 years at a rate of 10% is $50.
Step 2: Recall the formula for the difference between CI and SI for 2 years: Difference = P * (r^2) / (100^2), where r is the rate of interest.
Step 3: Substitute the values into the formula. Here, r = 10%, so we have: Difference = P * (10^2) / (100^2).
Step 4: Simplify the formula. 10^2 = 100, and 100^2 = 10000, so the formula becomes: Difference = P * (100) / (10000).
Step 5: This simplifies to: Difference = P / 100.
Step 6: We know the difference is $50, so we set up the equation: P / 100 = 50.
Step 7: To find P, multiply both sides of the equation by 100: P = 50 * 100.
Step 8: Calculate the value: P = 5000.

Compound Interest vs Simple Interest – Understanding the difference between compound interest and simple interest, particularly how they accumulate over time.
Formula Application – Applying the formula for the difference between compound interest and simple interest over a specified period.
Percentage Calculations – Calculating interest rates and understanding their impact on principal amounts.

If the difference between the compound interest and simple interest on a certain

What’s inside this PDF?

If the difference between the compound interest and simple interest on a certain

Practice Questions

Questions & Step-by-Step Solutions

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