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Question : If the difference between the compound interest and simple interest at 17% on a sum of money for 2 years (compounded annually) is INR 433.50, then the sum (in INR) is:

Option 1: 15,000

Option 2: 25,000

Option 3: 20,000

Option 4: 12,000


Team Careers360 17th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: 15,000


Solution : Difference between Compound Interest and Simple Interest for 2 years = $\frac{PR^{2}}{100^{2}}$ where $R$ is the rate of interest per annum compounded annually and $P$ is principal.
⇒ 433.50 = $P × \frac{17}{100}$ × $\frac{17}{100}$
⇒ 43350 × 100 = $P$ × 289
⇒ $P$ = $\frac{4335000}{289}$ = INR 15,000
Hence, the correct answer is 15,000.

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