On a certain sum of money lent out at 16% per annum, the difference between the compound interest for 1 year, payable half-yearly, and the simple interest for 1 year is Rs 60. Then find the sum.
Show answer & explanation
Correct answer: D
Explanation
The correct answer is option 4 i.e. Rs 9,375.
Let's assume P = x,
r = 16% and (8% Half yearly compounded)
n = 1 year and (2 year half yearly compounded)
Simple interest for 1 year = (x × 16 × 1)/100 = 4x/25
Compound interest for 1 year (Half yearly) = x {(1 + 8/100)2 - 1}
= x(729 - 625)/625 = 104x/625
Now, according to the question:
(104x/625) - (4x/25) = 60
4x/625 = 60
x = Rs 9,375