# Compound Interest Part 8

Problem 1: An equal principal was invested in two banks first offering 15% simple interest and the second offering compound interest of 20% if the difference of interest from both banks after 3 years was Rs.417. Find the principal invested in each bank?

Solution:

Simple Interest=15*3=45%

Compound Interest=20+20+$\frac{20\times&space;20}{100}$=44%

44+20+$\frac{44\times&space;20}{100}$=72.8%

72.8-45=27.8%

27.8%——–>417

100%———->?

$\frac{417\times&space;100}{27.8}=1500$

Problem 2: Simple interest on a principal of 2 years is 108.80 and compound interest on same principal for the same time period and rate of interest is  RS 115.60. Find the rate of interest?

Solution: Simple interest on a principal of 2 years is 108.80

Note: Simple interest is same for every year

$\frac{108.80}{2}=54.40$

54.40 S.I for the first year

54.40 S.I for the second year

Compound interest on same principal for the same time period and rate of interest is  Rs.115.60

115.60-108.80=6.8

1st year C.I is 54.40

2nd year C.I is 54.40+6.8

54.40|  54.40|  6.8

54.40$\times&space;\frac{x}{100}=6.8$

$x=&space;\frac{6.8\times&space;100}{54.40}=12.5$%

Problem 3: A sum of Rs.2592 was invested in two banks the first bank offers C.I of $16\frac{2}{3}$% compounded annually whereas the second bank offers S.I of $12\frac{1}{2}$%. Find the difference between S.I and C.I of 2 years 6 months?

Solution:

C.I is $16\frac{2}{3}$%=$\frac{1}{6}$

S.I is $12\frac{1}{2}$%=$\frac{1}{8}$

S.I=2592$\times&space;\frac{1}{8}\times&space;\frac{5}{2}=810$

C.I== 432+432+216+72+36+36+6 = 1230

Difference between C.I and S.I = C.I – S.I = 1230-810=420