Multiple choice

The compound interest on a certain sum for $2$ years at $10$% per annum is $Rs. 525$. The simple interest on the same sum for double the time at half the rate percent per annum is:

  1. $Rs. 400$
  2. $Rs. 500$
  3. $Rs. 600$
  4. $Rs. 800$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

CI = P(1+r/100)^n - P = 525. P(1.1^2 - 1) = 525. P(0.21) = 525. P = 525/0.21 = 2500. SI = (P * R * T)/100. New T = 2*2 = 4, New R = 10/2 = 5. SI = (2500 * 5 * 4)/100 = 500.

AI explanation

The effective compound interest rate for 2 years at 10% is 21%, making the principal 525 divided by 0.21, which is 2500. Using the simple interest formula, the interest on 2500 for 4 years at 5% is 2500 times 0.05 times 4. This equals 500, so the simple interest is Rs. 500.

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