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  4. If the compound interest on a certain sum of money for 2 years is ₹ 3280 . What would the corresponding simple interest be, given the rate of interest is 5 % per annum?

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Q. If the compound interest on a certain sum of money for 2 years is ₹ 3280 . What would the corresponding simple interest be, given the rate of interest is $5 \%$ per annum?

Simple Interest and Compound Interest

Solution:

(i) Find the principal from the given data.
(ii) Use $CI =P[(1+\frac{R}{100})^n-1]$,
$\text { i.e., } 3280=P[(1+\frac{5}{100})^2-1] \text {. }$
(iii) Find $P$ from the above information.
(iv) Now, use SI $=\frac{P \times R \times T}{100}$.