Multiple choice

If the difference between the compound interest and the simple interest on a certain sum for 2 years at 8% per annum is Rs. 32, the sum is -

  1. Rs. 5000

  2. Rs. 5220

  3. Rs. 5500

  4. Rs. 6000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

For 2 years at 8%, difference between CI and SI = P × (r/100)². Here: 32 = P × (8/100)² = P × 64/10000 = P/156.25. So P = 32 × 156.25 = Rs. 5000. Formula: Difference = P(r/100)² for 2 years. Option A (Rs. 5000) is correct. Simple interest for 2 years at 8% = 16% of P, compound interest = 16.64% of P, difference = 0.64% of P.

Keep practicing — related questions