Question

The compound interest on a certain sum at 4% per annum (compounded annually) for 2 years is ₹ 102. On the same principal at the same rate for the same time, the simple interest will be:

• A. ₹100
• B. ₹99
• C. ₹98
• D. ₹101

Answer 1

Answer:

A. ₹100

Solution: Given: Compound interest on a sum = Rs. 102 Rate of interest = 4% Time = 2 years Formula Used: For Compound Interest CI = P(1 + r/100)t – P For Simple Interest SI = P × R/100 × T Calculation: 102 = P( 1 + 4/100)2 - P ⇒ 102 = P(104/100)2 – P ⇒ 102 = 1.0816P – P ⇒ 102 = 0.0816P ⇒ P = 1250 Now to calculate SI SI = 1250 × 4/100 × 2 = 100 ∴ The simple interest will be Rs.100