The compound interest and simple interest on a certain principal amount at the same rate for two years are Rs.11730 and Rs.10200 respectively. What is the principal amount?

Explanation

The simple interest for one year is Rs.10200 ÷ 2 = Rs.5100, which is also the compound interest for the first year. The difference between compound and simple interest for two years is Rs.11730 - Rs.10200 = Rs.1530, which equals the interest on Rs.5100 for one year. Using this, the rate of interest is (100 × 1530) ÷ (5100 × 1) = 30% per annum. Therefore, the principal amount is (100 × 10200) ÷ (30 × 2) = Rs.17000.