Question
On a certain sum of money, the difference between the compound interest for a year, payable half yearly, and the simple interest for a year is Rs. 56. If the rate of interest in both the cases is 16%, then the sum is ?
Answer: Option C
When the money is compounded half yearly the effective rate of interest for 6 months = $$\frac{{16}}{2}$$ = 8% = $$\frac{{2}}{25}$$
Let principal = (25)2 = 625
⇒ 4 units → 56
⇒ 1 unit → 14
⇒ Principal = 14 × 625 = Rs. 8750
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When the money is compounded half yearly the effective rate of interest for 6 months = $$\frac{{16}}{2}$$ = 8% = $$\frac{{2}}{25}$$
Let principal = (25)2 = 625
⇒ 4 units → 56
⇒ 1 unit → 14
⇒ Principal = 14 × 625 = Rs. 8750
Was this answer helpful ?
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