The difference between simple and compound interests compounded annually on a certain sum of money for 2 years at 4% per annum is Re. 1. The sum (in Rs.) is:

A. 625

B. 630

C. 635

D. 640

View Answer

1

Correct Answer :
625

Explanation :

Let the Principal be P, then

C.I = P x ( 1 + (4/100) )² - P = 51P/625

S.I = P x 4 x 2 / 100 = 2P/25

=> C.I - S.I = 1 = (51P/625) - (2P/25)

=> P = Rs. 625/-

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A bank offers 5% compound interest calculated on half-yearly basis. A customer deposits Rs. 1600 each on 1st January and 1st July of a year. At the end of the year, the amount he would have gained by way of interest is:

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