Multiple choice

The compound interest accrued on an amount of Rs. 16800 at the end of two years was Rs. 5418. What would be the simple interest accrued on the same amount at the same rate for the same period?

  1. Rs. 5070

  2. Rs. 5040

  3. Rs. 5210

  4. Rs. 5280

  5. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

CI = P[(1+r/100)^2 - 1] = 5418. 16800[(1+r/100)^2 - 1] = 5418. (1+r/100)^2 - 1 = 0.3225. (1+r/100)^2 = 1.3225. 1+r/100 = 1.15. r = 15%. SI = P*r*t/100 = 16800 * 0.15 * 2 = 5040.

AI explanation

Using the compound interest formula, the amount after two years is 16800 + 5418 = Rs. 22218. This gives the equation 22218 = 16800 x (1 + R/100)^2, so (1 + R/100)^2 = 1.3225. Taking the square root gives 1 + R/100 = 1.15, meaning the rate of interest is 15% per annum. Using the simple interest formula, SI = (16800 x 15 x 2) / 100, which equals Rs. 5040. The correct answer is Rs. 5040.

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