Math Problem Statement
when the rate of interest of Compound interest is 3/2 times of the rate of interst of Simple interest, the difference between Compound interest and Simple interest on a certain sum for 2 years is Rs 4900.When the rate of interest for Compound interest is equal to the rate of interest of Simple interest the difference between Compound interest and Simple interest on a certain sum for 2 years is Rs 400. Find the principal .
Solution
Let's denote:
- as the principal.
- as the rate of interest for simple interest (SI).
- as the rate of interest for compound interest (CI) in the first case.
Case 1:
The rate of interest for CI is and for SI is . The difference between CI and SI for 2 years is Rs 4900.
Simple Interest (SI) formula for 2 years:
Compound Interest (CI) formula for 2 years:
The difference between CI and SI is given as Rs 4900. Thus: Substitute the expressions for CI and SI into this equation.
Case 2:
The rate of interest for both CI and SI is . The difference between CI and SI for 2 years is Rs 400.
Compound Interest (CI) formula when rate is :
The difference between CI and SI is given as Rs 400. Thus:
Now, we need to solve these two equations to find the value of the principal . Let's start by simplifying the compound interest formula for both cases.
Case 2 Simplification:
Expanding the CI formula: The difference between CI and SI is:
Case 1 Simplification:
Expanding the CI formula: The difference between CI and SI is:
Now, solving equations (1) and (2) will give us the value of .
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Math Problem Analysis
Mathematical Concepts
Compound Interest
Simple Interest
Algebra
Formulas
Simple Interest (SI) = (P × r × t) / 100
Compound Interest (CI) = P × (1 + r/100)^t - P
Difference between CI and SI
Theorems
Interest formulas for Simple and Compound Interest
Suitable Grade Level
Grades 10-12
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