Multiple choice

If the difference between CI and SI on Rs.10 lakh was Rs.36 in 2 years, the rate of yearly interest is:

  1. 0.6

  2. 0.5

  3. 1.5

  4. 2/3

  5. 1.8
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A Correct answer
Explanation

Difference between CI and SI for 2 years = P * (r/100)^2. 36 = 1,000,000 * (r/100)^2. 36 = 100 * r^2. r^2 = 0.36. r = 0.6%.

AI explanation

The formula for the difference between compound interest and simple interest for two years is principal multiplied by the square of the rate divided by 10000. Substituting the given values gives 1000000 multiplied by the square of R divided by 10000 equaling 36. Solving for the square of R gives 100 times the square of R equals 36, so the rate R is the square root of 0.36, which results in a rate of 0.6 percent.

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