Multiple choice

The difference between the compound interest and simple interest on 8.5 % per annum for two years is ₹ 28.90. If x is invested on compound interest at the same rate of interest for two years then find the interest?

  1. 700

  2. 710

  3. 708.9

  4. 705.5

  5. 700.9
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The difference between CI and SI for 2 years at 8.5% is ₹28.90. Using formula CI - SI = P × (r/100)², we get P × (8.5/100)² = 28.90, so P = 28.90 × 10000/72.25 = ₹4000. CI on ₹4000 for 2 years at 8.5% = 4000 × [(1.085)² - 1] = 4000 × 0.177225 = ₹708.90, matching option C.

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