Discussion

Question:

The difference between S.I. and C.I. on a certain sum of money at 5% p.a. for 2 years is Rs. 30. Find the sum.

Explanation:

CI for 2 years = $[P {(1 + \frac{5}{100})}^{2} - P]$

SI for 2 years = $\frac{P \times 5 \times 2}{100}$

Difference = $[P {(1 + \frac{5}{100})}^{2} - P] - \frac{P \times 5 \times 2}{100} = 30$

= $(1 . 05^{2} P - P) - 0.1 P = 30$

⇒ (1.1025P – P) – 0.1P = 30

⇒ 0.0025P = 30

⇒ P = 12000

Hence, option (c).

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