Discussion

A person got Rs.48 more when he invested a certain sum at compound interest instead of simple interest for two years at 8% p.a. Find the sum?

Answer: A

Over two years the gap between compound and simple interest is

\[ \text{CI} - \text{SI} = P\left(\frac{R}{100}\right)^{2} \]

\[ 48 = P(0.08)^{2} = 0.0064P \]

\[ P = \frac{48}{0.0064} = \text{Rs. } 7500 \]

Checking: SI = Rs. 1200 and CI = \( 7500(1.1664 - 1) = 1248 \) - exactly Rs. 48 more.

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