Discussion Forum

A sum of money is lent out at compound interest for 2 years at 20% per annum. It would fetch Rs. 482 more if the interest is compounded half yearly, than if it were compounded yearly, the sum of money is

Answer:

Explanation:

$P\left[\left(1+\frac{10}{100}\right)^{4}\right]$ $-P\left[\left(1+\frac{20}{100}\right)^{2}\right]$ $= 482$

$P[\left(1+\frac{10}{100}\right)^{4}$ $-\left(1+\frac{20}{100}\right)^{2}]$ $= 482$

$\Leftrightarrow P[\left(\frac{11}{10}\times\frac{11}{10}\times\frac{11}{10}\times\frac{11}{10}\right)$ $-\left(\frac{6}{5}\times\frac{6}{5}\right)]$ $=482$

$\therefore P$ = 20,000