Question

The difference between compound interest and simple interest earned on Rs 15,000 in 2 years is Rs 384, find the interest rate per annum.

• A. 16%
• B. 14%
• C. 18%
• D. 20%

Answer 1

Answer:

A. 16%

Solution:

Given:

Difference of C.I. and S.I. = Rs. 384

Time = 2 years

Principal = Rs. 15,000

Formula used:

Difference of C.I. and S.I. in 2 years = (r²/10000) × Principal

Calculation:

Difference of C.I. and S.I. in 2 years = (r²/10000) × Principal

⇒ 384 = (r²/10000) × 15,000

⇒ 3840 = 15 r² 

⇒ r² = 3840/15 = 256 

⇒ r = 16 % 

∴ The rate of interest per annum is 16 %