Multiple choice

The difference between simple and compound interest on a certain sum at 10% per annum after 2 years is Rs. 100. What will be the total simple interest on the same sum and at the same rate after 3 years?

  1. Rs. 3000

  2. Rs. 1500

  3. Rs. 2000

  4. Rs. 4500

  5. None of these
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A Correct answer
Explanation

For 2 years, CI - SI = P(r/100)^2. 100 = P(0.1)^2 = 0.01P, so P = 10000. Simple interest for 3 years is 10000 * 0.1 * 3 = 3000.

AI explanation

The difference between compound interest and simple interest for two years is given by Principal multiplied by Rate over 100 squared, which equals Principal multiplied by 0.1 squared to equal Rs. 100. Solving this gives a principal of Rs. 10000. The total simple interest after 3 years is then 10000 multiplied by 10 multiplied by 3 divided by 100, resulting in Rs. 3000.

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