Mathematics for FinanceMTP Oct 21, ICAI SMQuestion 1339 of 512
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The difference between Compound Interest and Simple Interest on a certain sum for 2\displaystyle 2 years at 6%\displaystyle 6\% p.a. is 13.50\displaystyle 13.50. Find the sum

Options

A3750\displaystyle 3750
B2750\displaystyle 2750
C4750\displaystyle 4750
Dnone of these
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Correct Answer

✅ Option a — 3750\displaystyle 3750

All Options:

  • A3750\displaystyle 3750
  • B2750\displaystyle 2750
  • C4750\displaystyle 4750
  • Dnone of these

Detailed Solution & Explanation

**Derivation of Principal Sum** Given: - Time (t\displaystyle t) = 2\displaystyle 2 years - Rate of Interest (r\displaystyle r) = 6%\displaystyle 6\% per annum - Difference between Compound Interest and Simple Interest (CI−SI\displaystyle CI - SI) = Rs. 13.50\displaystyle \text{Rs. }13.50 **Step 1: Use the difference formula for 2 years** Difference=P(r100)2\text{Difference} = P \left(\frac{r}{100}\right)^2 13.50=P(6100)213.50 = P \left(\frac{6}{100}\right)^2 13.50=P(0.06)213.50 = P (0.06)^2 13.50=0.0036P13.50 = 0.0036 P **Step 2: Solve for P\displaystyle P** P=13.500.0036=Rs. 3,750P = \frac{13.50}{0.0036} = \text{Rs. }3,750 Hence, **Option A** is the correct answer.

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