Multiple choice

If the difference between the compound interest and simple interest at 17% on a sum for 2 years (compounded annually) is Rs.433.50. Then the compound interest (in Rs.) is:

  1. 5,533.50

  2. 2,735.50

  3. 5,100

  4. 2,500
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A Correct answer
Explanation

For 2 years at 17%, CI - SI = P(r²/100) where r is rate. 433.50 = P(17²/100) = P(2.89), so P = 150. CI = P(1 + r/100)² - P = 150(1.17² - 1) = 150(0.2889) = 43.33. CI = 150 + 43.33 = 5,533.50.

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