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:

  • PP as the principal.
  • rr as the rate of interest for simple interest (SI).
  • 32r\frac{3}{2}r as the rate of interest for compound interest (CI) in the first case.

Case 1:

The rate of interest for CI is 32r\frac{3}{2}r and for SI is rr. The difference between CI and SI for 2 years is Rs 4900.

Simple Interest (SI) formula for 2 years:

SI=P×r×2100\text{SI} = \frac{P \times r \times 2}{100}

Compound Interest (CI) formula for 2 years:

CI=P×(1+32r100)2P\text{CI} = P \times \left(1 + \frac{\frac{3}{2}r}{100}\right)^2 - P

The difference between CI and SI is given as Rs 4900. Thus: CISI=4900\text{CI} - \text{SI} = 4900 Substitute the expressions for CI and SI into this equation.

Case 2:

The rate of interest for both CI and SI is rr. The difference between CI and SI for 2 years is Rs 400.

Compound Interest (CI) formula when rate is rr:

CI=P×(1+r100)2P\text{CI} = P \times \left(1 + \frac{r}{100}\right)^2 - P

The difference between CI and SI is given as Rs 400. Thus: CISI=400\text{CI} - \text{SI} = 400

Now, we need to solve these two equations to find the value of the principal PP. Let's start by simplifying the compound interest formula for both cases.

Case 2 Simplification:

Expanding the CI formula: CI=P×[(1+r100)21]\text{CI} = P \times \left[\left(1 + \frac{r}{100}\right)^2 - 1\right] CI=P×[r210000+2r100]\text{CI} = P \times \left[\frac{r^2}{10000} + \frac{2r}{100}\right] The difference between CI and SI is: P×(r210000+2r100)P×2r100=400P \times \left(\frac{r^2}{10000} + \frac{2r}{100}\right) - P \times \frac{2r}{100} = 400 P×r210000=400(1)P \times \frac{r^2}{10000} = 400 \quad \text{(1)}

Case 1 Simplification:

Expanding the CI formula: CI=P×[(1+3r200)21]\text{CI} = P \times \left[\left(1 + \frac{3r}{200}\right)^2 - 1\right] CI=P×[9r240000+6r200]\text{CI} = P \times \left[\frac{9r^2}{40000} + \frac{6r}{200}\right] The difference between CI and SI is: P×(9r240000+6r200)P×2r100=4900P \times \left(\frac{9r^2}{40000} + \frac{6r}{200}\right) - P \times \frac{2r}{100} = 4900 P×(9r240000+6r2002r100)=4900(2)P \times \left(\frac{9r^2}{40000} + \frac{6r}{200} - \frac{2r}{100}\right) = 4900 \quad \text{(2)}

Now, solving equations (1) and (2) will give us the value of PP.

Let me calculate this for you.

Ask a new question for Free

By Image

Drop file here or Click Here to upload

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