Multiple choice

Compound interest on a sum of money for 2 years at 4% per annum is Rs. 2448. Simple interest on the same sum of money at the same rate of interest for 2 years will be

  1. Rs. 2500

  2. Rs. 2400

  3. Rs. 2360

  4. Rs. 2250
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For 2 years at 4%, CI = P * ((1.04)^2 - 1) = P * 0.0816. 0.0816P = 2448, so P = 30000. SI = P * R * T / 100 = 30000 * 4 * 2 / 100 = 2400.

AI explanation

Using the formula for compound interest for two years, P times the quantity R squared divided by 10000 gives the extra interest, so 2448 equals SI plus P times R squared divided by 10000. The simple interest for two years is P times R times 2 divided by 100. Substituting the values, 2448 equals P times 0.0816, which means P equals 30000. The simple interest is 30000 times 4 times 2 divided by 100, which is Rs. 2400.

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