Multiple choice

If the difference between the compound interest and the simple interest for a sum of money P for 2 years at a rate of 20% is Rs. 120, then find the amount invested (P).

  1. Rs. 1800

  2. Rs. 2000

  3. Rs. 2500

  4. Rs. 3000

  5. Rs. 3500
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

For 2 years, the difference between compound interest and simple interest is P * (r/100)^2. Given 120 = P * (20/100)^2, we have 120 = P * (1/5)^2 = P/25. Thus, P = 120 * 25 = 3000.

AI explanation

For 2 years, the difference between compound interest and simple interest is given by the formula Difference = P * (R / 100)^2. Substituting the given values gives 120 = P * (20 / 100)^2, which simplifies to 120 = P * 0.04. Solving for P gives P = 120 / 0.04, making the amount invested Rs. 3000.

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