Question : The difference between the compound interest (compounding half-yearly) for 1 year and the simple interest for 1 year on a certain sum lent out at the annual rate of 10% is Rs, 25. What is the sum?
Option 1: Rs. 12000
Option 2: Rs. 6000
Option 3: Rs. 8000
Option 4: Rs. 10000
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Correct Answer: Rs. 10000
Solution :
Given,
Difference between compound interest and simple interest = Rs. 25,
Annual interest rate = 10%
We know,
Compound Interest for 1 year =
Simple Interest for 1 year =
Let the principal sum be
The given difference is:
⇒
⇒
⇒
⇒
⇒
⇒
⇒
Hence, the correct answer is Rs. 10000.
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