Multiple choice

The difference between C. I. and S. I. on Rs. $20,000$ for two years is Rs. $200$ at the same rate of interest per annum. Find the rate of interest.

  1. $10$
  2. $20$
  3. $15$
  4. $25$
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A Correct answer
Explanation

The difference between CI and SI for 2 years is given by the formula: Difference = P * (r/100)^2. Plugging in the values: 200 = 20000 * (r/100)^2. This simplifies to 200/20000 = (r/100)^2, so 1/100 = (r/100)^2. Taking the square root, 1/10 = r/100, so r = 10.

AI explanation

For two years, the difference between compound interest and simple interest is calculated using the formula Difference = Principal times (Rate divided by 100) raised to the power of 2. Substituting the given values gives 200 = 20000 times (R divided by 100) raised to the power of 2. Simplifying this yields 0.01 = R squared divided by 10000, which further simplifies to 100 = R squared. Taking the square root gives the rate of interest as 10 percent.

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