Multiple choice

Daisy and Josie deposited same amount, i.e. Rs. 20,000, for 2 years on simple interest and compound interest, respectively. The difference between their interests is Rs. 50. Find the rate.

  1. 7%

  2. 2%

  3. 5%

  4. 8%

  5. 10%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For 2 years, the difference between CI and SI is P*(r/100)^2. 50 = 20000 * (r/100)^2. 50/20000 = (r/100)^2. 1/400 = (r/100)^2. 1/20 = r/100. r = 5%.

AI explanation

The difference between compound interest and simple interest on a principal P for 2 years at rate R is given by the formula P * R squared / 10000. Substituting the given values, we get 50 = 20000 * R squared / 10000, which simplifies to 50 = 2 * R squared. Solving for R gives R squared = 25, so the rate is 5%.

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