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Arithmetic
Simple and Compound Interest
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NTPC Graduate Tier 1 2016 Shift 2 📅 02 Apr, 2016

The simple interest on a certain sum of money invested at a certain rate for 2 years amounts to Rs. 1200. The compound interest on the same sum of money invested at the same rate of interest for 2 years amounts to Rs. 1290. What was the principal?

A
Rs. 12000
B
Rs. 16000
C
Rs. 6000
D
Rs. 4000
Result Summary
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NTPC Graduate Tier 1
2016 • 02 Apr, 2016 • Shift 2
The simple interest on a certain sum of money invested at a certain rate for 2 years amounts to Rs. 1200. The compound interest on the same sum of money invested at the same rate of interest for 2 years amounts to Rs. 1290. What was the principal?
Correct Answer
Rs. 4000
Simple Interest Breakdown: SI for 2 years is Rs. 1200. Since SI is constant, SI for 1st year = Rs. 600 and 2nd year = Rs. 600.Compound Interest Analysis: CI for......
Ref/Book : NTPC Graduate Tier 1 2016
Ref. Subject Arithmetic
Chapter -
Ref. Topic Simple and Compound Interest
Pg. No -
💡 Analysis & Explanation
Simple Interest Breakdown ▼
SI for 2 years is Rs. 1200. Since SI is constant, SI for 1st year = Rs. 600 and 2nd year = Rs. 600.
Compound Interest Analysis ▼
CI for 2 years is Rs. 1290. The 1st year CI is the same as SI (Rs. 600). The 2nd year CI is Rs. 690.
Rate Calculation ▼
The extra Rs. 90 earned in the second year is the interest calculated strictly on the first year's interest (Rs. 600). Rate = (90 / 600) * 100 = 15%.
Principal Extraction ▼
Since SI for 1 year = 600 at 15% rate, Principal = (100 * SI) / (Rate * Time) = (100 * 600) / (15 * 1) = 4000.
Conclusion ▼
The original principal invested was Rs. 4000.
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