Question 70

The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Rs. 1. The sum (in Rs.) is:

Solution

Rate of interest (r) = 4 % and time (t) = 2 years

Difference between simple and compound interests (d) = Rs. 1

Then, the sum = $$\frac{d \times (100)^t}{(r)^t}$$

= $$\frac{1 \times (100)^2}{(4)^2} = \frac{10000}{16}$$

= Rs. 625

=> Ans - (D)

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