The compound interest on a sum of money is three times the simple interest on the same amount of money when it is invested at the rate of 10%interest for a period of 2 years. Find the sum of money being invested upon?
The compound interest on a sum of money is three times the simple interest on the same amount of money when it is invested at the rate of 10%interest for a period of 2 years. Find the sum of money being invested upon?
1). Rs. 1331
2). Rs. 1534
3). Rs. 3431
4). Cannot be determined
1 answers
We know the formula for compound interest
$(CI = \left[ {\left( {P{{\left\{ {1 + \frac{r}{{100}}} \right\}}^t} - 1} \right)} \right])$
Where CI = compound interest; P = principal; R = rate of interest and t = time period
We know the formula for simple interest
⇒ SI = (p × r × t)/100
Where SI = Simple interest; P = principal; R = rate of interest and t = time period
Given that Compound interest = 3 × Simple Interest
$(\Rightarrow P \times r \times t = 3 \times \left[ {\left( {P{{\left\{ {1 + \frac{r}{{100}}} \right\}}^t} - 1} \right)} \right])$
In the above equation, P gets cancelled on both the sides of the equation
∴ Value of P cannot be determined