Multiple choice

The compound interest on a certain amount for 2 years at the rate of 8% per annum is Rs.312 .What will be the simple interest on the same amount at same rate and same time?

  1. Rs.349.92

  2. Rs. 300

  3. Rs. 296.92

  4. Rs. 200
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let P be the principal amount. Compound interest for 2 years at 8% is P[(1.08)^2 - 1] = P[1.1664 - 1] = 0.1664P = 312. Solving gives P = 1875. Simple interest = Prt = 1875 × 0.08 × 2 = 300. Option A (Rs. 349.92) incorrectly uses the compound interest formula again. Option C is a calculation error.

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