Multiple choice

The difference between the compound interest and simple interest for 2 years is Rs 16 at 12.5% on the same sum. Find the sum.

  1. Rs 2048

  2. Rs 1024

  3. Rs 512

  4. Rs 1236
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For 2 years, the difference between compound and simple interest is P × r², where r is the rate in decimal form. Here: 16 = P × (0.125)² = P × 0.015625. Solving: P = 16 / 0.015625 = 1024.

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