Question

The compound interest on a certain sum for 2 years at 8% per annum is Rs. 1,040 The simple interest on it at the same ratio for 2 years is :

• A. 1000
• B. 980
• C. 1200
• D. 990

Answer 1

Answer:

A. 1000

The compound interest earned on a certain sum at 8% per annum for 2 years is Rs. 1,040 A = P[1 + R /100]^n A = P + I P + 1040 = P[1 + R /100]^n 1040 = P[1 + 8 /100]² - P 1040 = P[108/100]² - P 1040 = {729P - 625P }/625 1040 = 104P/625 P = 1040 × 625/104 = 6250 The simple interest earned on the same sum at the same rate for 2 years is: = PnR/100 = 6250 × 2 × 8/100 = 1000