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 :
A1000
B980
C1200
D990
Answer:
A. 1000
Read Explanation:
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