Multiple choice

The compound interest on a certain sum of money at 5% per annum for 2 years is Rs. 230.20. The compound interest on the same sum of money for the same time period at 4% per annum will be

  1. Rs. 136.7

  2. Rs. 156.34

  3. Rs. 183.26

  4. Rs. 145.56

  5. Rs. 193.50
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

CI = P * ((1+r/100)^n - 1). For 5%, 230.20 = P * ((1.05)^2 - 1) = P * 0.1025. P = 230.20 / 0.1025 = 2245.85. CI at 4% = 2245.85 * ((1.04)^2 - 1) = 2245.85 * 0.0816 = 183.26.

AI explanation

Using the compound interest formula for two years P * R * (200 + R) / 10000 = CI, we substitute the given values to find the principal: P * 5 * 205 / 10000 = 230.20. Solving this gives the principal sum as Rs. 2240. Applying the same formula for the 4% interest rate, the compound interest becomes 2240 * 4 * 204 / 10000, which calculates to Rs. 183.26.

Keep practicing — related questions