Multiple choice

Compound interest (compounded annually) on a certain sum of money for 1 year at 10% rate is Rs. 455. What will be the simple interest (in Rs.) on the same sum of money at half the rate of interest and time period of 2 years?

  1. 615

  2. 575

  3. 455

  4. 490

  5. 385
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

CI = P(1 + r/100)^n - P. 455 = P(1.10) - P = 0.1P. P = 4550. Simple interest = P * (r/2) * t / 100 = 4550 * 5 * 2 / 100 = 4550 * 0.1 = 455.

AI explanation

For compound interest compounded annually over one year, the formula is principal multiplied by the rate divided by 100, meaning the principal sum is 455 multiplied by 100 and then divided by 10 to equal Rs. 4550. The new simple interest calculation uses half the original rate, which is 5 percent, and a time period of 2 years. The required simple interest is 4550 multiplied by 5 multiplied by 2 and then divided by 100, which equals Rs. 455.

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