## The simple interest on a sum of money for 2 years at 12percent per annum is 1380

**The simple interest on a sum of money for 2 years at 12% per annum is 1380. Find:**

**(i) the sum of money.**

**(ii) the compound interest on this sum for one year payable half-yearly at the same rate.**

**Solution:**

Principal (P) = ₹ 5750

Rate of interest (R) = 12% p.a. or 6% half-yearly

Period (n) = 1 year – 2 half years

Amount (A) = P (1 + R/100)^{n}

= 5750 (1 + 6/100)^{2}

= 5750 × (53/50)^{2}

= 5750 × 53/50 × 53/50

= ₹ 6460.70

Compound Interest = A – P

= 6460.70 – 5750

= ₹ 710.70

see also: Maths