Question

Kamal and Anand each Lent the same sum of money for 2 years at 5 percent at simple interest and compound interest respectively. Anand received RS.15 more than Kamal.Find the amount of money lent by each and interest received

Answer 1

• amount lent: ₹6000
• interest received: Kamal, ₹600; Anand, ₹615.

Explanation:

For principal P invested at simple interest rate r, the returned value in t years is ...

A = P(1 +rt)

If K is Kamal's returned value, the given numbers tell us ...

K = P(1 +0.05·2) = 1.1P

__

For principal P invested at compound interest rate r, with interest compounded annually for t years, the returned value is ...

A = P(1 +r)^t

If A is Anand's returned value, the given numbers tell us ...

A = P(1.05)² = 1.1025P

This latter amount is RS.15 more than the former one, so we have ...

1.1025P = 1.1P +15

0.0025P = 15 . . . . . . . . subtract 1.1P

P = 6000 . . . . . . . . . . . divide by 0.0025 . . . . the amount lent

Kamal received 1.1P -P = 0.1P = 600 on the investment.

Each lent ₹6000. Kamal received ₹600 in interest; Anand received ₹615 in interest.