Multiple choice

The difference in simple interest and compound interest for two years is Rs,144 at the rate of 20% per annum.Then what is the amount?

  1. Rs.3000

  2. Rs.3600

  3. Rs.4500

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

The difference between CI and SI for 2 years is CI - SI = P(r/100)² where P is principal. Given: 144 = P(20/100)² = P(0.04), so P = 144/0.04 = Rs.3600. The amount asked for is Rs.3600. Verification: SI for 2 years at 20% = Rs.1440, CI = 3600(1.2)² - 3600 = Rs.1584, difference = Rs.144.

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