Multiple choice

The difference between simple interest and compound interest at the same rate of rupees 10,000 for two years is rupees 25. The rate of interest is :

  1. 14%

  2. 10%

  3. 5%

  4. 12%
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

For 2 years, the difference between CI and SI is P * (r/100)^2. 25 = 10000 * (r/100)^2. 25 = 10000 * (r^2 / 10000). 25 = r^2. r = 5%.

AI explanation

The formula for the difference between compound interest and simple interest for two years is Difference = P(R/100)^2. Plugging in the given values, 25 = 10000(R/100)^2, which simplifies to 25 = R^2. Taking the positive square root, the rate of interest is 5%.

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