Multiple choice

If the difference between the C.I. compounded half yearly and simple interest on a sum at 10% per annum for one year is Rs. 25, the sum is:

  1. Rs.9000

  2. Rs.9500

  3. Rs,10,000

  4. Rs.10,500
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For half-yearly compounding, the rate per half-year is 5%. The excess of compound interest over simple interest for one year is P × (0.05)^2 = 0.0025P, so P = Rs. 10,000.

AI explanation

Using the formula for the difference between compound interest compounded half-yearly and simple interest for one year, we have Difference = P × (R/200)^2. Substituting the given values, 25 = P × (10/200)^2, which simplifies to 25 = P × 0.0025. Solving for the principal gives P = 25 / 0.0025, resulting in a sum of Rs. 10,000.

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