Question : On a certain sum of money lent out at 16% per annum, the difference between the compound interest for 1 year, payable half-yearly, and the simple interest for 1 year is Rs. 60. The sum is:
Option 1: Rs. 937.5
Option 2: Rs. 9,000
Option 3: Rs. 9,365
Option 4: Rs. 9,375
Correct Answer: Rs. 9,375
Solution :
Given: Rate = 16%
Time = 1 year
Difference between the compound interest for 1 year, payable half-yearly, and the simple interest for 1 year = Rs. 60
We know that,
Compound interest =
⇒ Compound interest =
=
=
Now, Simple interest =
=
=
From equation (1) and (2), we get:
⇒
Hence, the correct answer is Rs. 9,375.
