Multiple choice

A certain sum amounts to Rs.291600 in 2 years and to Rs.314928 in 3 years on compound interest compounded annually. How much will be the simple interest (in Rs.) on Rs.40000 at the same rate for 2 years?

  1. 6400

  2. 7500

  3. 7200

  4. 8000
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A Correct answer
Explanation

From the compound interest data, we can find the rate by dividing the amount after 3 years by the amount after 2 years: 314928/291600 = 1.08, giving an 8% annual rate. Simple Interest on Rs.40000 for 2 years at 8% is calculated as SI = (40000 × 8 × 2)/100 = Rs.6400.

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