Multiple choice

The difference between simple interest and compound interest on a certain sum of money at the end of 2 years is Rs. 117 at 15% per annum, the interest being credited annually. The principal is-

  1. Rs. 5,200

  2. Rs. 5,980

  3. Rs. 6,760

  4. None of these.
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A Correct answer
Explanation

For 2 years, the difference between CI and SI is given by P * (r/100)^2. Here, 117 = P * (15/100)^2 = P * (3/20)^2 = P * (9/400). Thus, P = 117 * 400 / 9 = 13 * 400 = 5,200.

AI explanation

Using the formula for the difference between compound interest and simple interest for two years, the difference equals the principal multiplied by the square of the rate divided by 10000. Substituting the given values, 117 equals P multiplied by 15 squared divided by 10000, which is P multiplied by 225 divided by 10000. Solving for P gives 117 multiplied by 10000 divided by 225, which results in a principal of 5200.

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