Multiple choice

What will be the simple interest on the same amount if the compound interest compounded annually is Rs. 6699 at 3% per annum for 2 years?

  1. Rs. 5200

  2. Rs. 5700

  3. Rs. 6450

  4. Rs. 6600

  5. Rs. 6722
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

CI = P((1+r/100)^n - 1). 6699 = P((1.03)^2 - 1) = P(1.0609 - 1) = P(0.0609). P = 6699 / 0.0609 = 110,000. SI = P * r * n / 100 = 110,000 * 0.03 * 2 = 6600.

AI explanation

Using the compound interest formula for two years, 6699 = Principal multiplied by (1 plus 3 by 100) squared minus Principal, which means 6699 = Principal multiplied by 0.0609. Solving this gives the principal as 6699 divided by 0.0609, which equals approximately Rs. 110000. The simple interest is calculated as 110000 multiplied by 3 multiplied by 2 divided by 100, resulting in Rs. 6600.

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