Multiple choice

The compound interest on a certain sum of money at 5% p.a. for 2 years is Rs. 246. What will be the simple interest on the same for 3 years at 6% p.a?

  1. Rs. 250

  2. Rs. 640

  3. Rs. 420

  4. Rs. 432

  5. Rs. 482
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

CI = P(1+r/100)^n - P. 246 = P(1.05^2 - 1) = P(0.1025). P = 246 / 0.1025 = 2400. SI = (P * R * T) / 100 = (2400 * 6 * 3) / 100 = 24 * 18 = 432.

AI explanation

Using the formula for compound interest for two years, CI = P * (R^2 / 10000 plus 2R / 100), we set up the equation 246 = P * (25 / 10000 plus 10 / 100). This simplifies to 246 = P * 0.1025, giving a principal of P = 2400. The simple interest on this principal for 3 years at 6 percent is calculated as (2400 * 6 * 3) / 100, which equals Rs. 432.

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