SBI PO – 2015 – 19

Question: On what sum will the difference between the simple and compound interest for 2 years at 4% per annum amounts to Re.1, interest is compounded yearly. [किस मूलधन पर 4% वार्षिक की दर से 2 वर्षों में साधारण एवं चक्रवृधि ब्याज का अंतर 1 रूपये होगा; जबकि ब्याज वार्षिक संयोजित होता है?]    [Ans. (c) Rs 625].            

(a) Rs. 650    (b) Rs. 630   (c) Rs. 625  (d) Rs. 64   (e) none of these

Detailed explanation:

First Method :                                  

For the first year, there is no difference between SI and CI. So, the difference between SI and CI during the second year is the difference between SI and CI in two years.

Therefore, difference = Re 1 = 4%, where as the SI of the first year is 100%. So,   

                                               4% ≡ Re 1                                                                   

                                           100% ≡ ? = Rs 25 (SI)                                                                                                                            

Simple Interest thus obtained is 4% of the principal. So,

                                       (SI) 4% ≡ Re 25 (SI)                                                                   

                 (PRINCIPAL) 100% ≡ ? = Rs 625 Ans.                                                                                                                          

Second Method:  

Where P = principal, r = rate of interest

Third Method : If principal is Rs 100, then 4% of Rs 100 = Rs 4 is the simple interest for the first year. Difference for the second year is 4% of Rs 4 = 0.16. Therefore, 0.16% is the difference between CI and SI, where as 100% is the principal.

(diff.) = 0.16% ≡ Re 1

(principal) = 100% ≡ ? = Rs 625 Ans.