A sum of money is put on compound interest for 2 years at 20%. It would fetch ₹964 more if the interest was payable half-yearly than if it was payable yearly. Find the sum.
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. ₹ 40000
r = 20% ; for half yearly r = 10%
n = 2 years ; for half yearly n = 4 years
Difference = 964
ATQ,
P × {(1 + 10/100)4 - 1} - P × {(1 + 20/100)2 - 1} = 964
⇒ 964 = P{(14641/10000 - 1) - (36/25 - 1)}
⇒ 964 = P{(4641/10000) - (11/25)}
⇒ 964 = P{(4641 - 4400)/10000}
⇒ 964 = 241P/10000
P = 40,000