Mathematics for FinanceMTP June 24 Series IQuestion 1405 of 512
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The difference between compound interest and simple interest on a certain sum for 2 years @ 10%\displaystyle 10\% p.a. is 100\displaystyle 100. Find the sum:

Options

A10,100\displaystyle 10,100
B10,950\displaystyle 10,950
C10,000\displaystyle 10,000
D9,900\displaystyle 9,900
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Correct Answer

✅ Option c — 10,000\displaystyle 10,000

All Options:

  • A10,100\displaystyle 10,100
  • B10,950\displaystyle 10,950
  • C10,000\displaystyle 10,000
  • D9,900\displaystyle 9,900

Detailed Solution & Explanation

Let the principal be P\displaystyle P. The rate of interest is r=10%\displaystyle r = 10\% p.a., so i=10100=0.10\displaystyle i = \frac{10}{100} = 0.10. The time period is t=2\displaystyle t = 2 years. The formula for the difference between Compound Interest (CI\displaystyle CI) and Simple Interest (SI\displaystyle SI) for a 2\displaystyle 2-year period is: CI−SI=P×i2CI - SI = P \times i^2 Given that the difference is Rs. 100\displaystyle \text{Rs. }100: 100=P×(0.10)2100 = P \times (0.10)^2 100=P×0.01100 = P \times 0.01 Solving for P\displaystyle P: P=1000.01=10,000P = \frac{100}{0.01} = 10,000 Thus, the sum is Rs. 10,000\displaystyle \text{Rs. }10,000. Hence, **Option C** is the correct answer.

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