Multiple choice

The difference between C.I. and S.I. on a certain sum of money at the rate of 5% per annum for three years is Rs. 190625 then find the difference between C.I. and S.I. for two years at the same rate of interest and same sum.

  1. Rs. 82500

  2. Rs. 25000

  3. Rs. 72500

  4. Rs. 62500

  5. None of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For 3 years at 5%, CI - SI = P[(1+r/100)³ - 1 - 3r/100] = P[(1.05)³ - 1 - 0.15] = P[1.157625 - 1 - 0.15] = P(0.007625). Given this equals 190625, so P = 190625/0.007625 = 25000000. For 2 years: CI - SI = P[(1.05)² - 1 - 0.10] = 25000000[1.1025 - 1 - 0.10] = 25000000(0.0025) = 62500. Or use direct formula: Difference for n years = P(r/100)²(n-1)/2 for first 2 years, but the 3-year formula gives us P, then apply for 2 years.

Keep practicing — related questions