Multiple choice

Compound interest compounded annually on certain amount of money at a rate of 6% per annum for 2 years is Rs. 7416. What would be the simple interest incurred on the same amount at same rate and for same time period?

  1. Rs. 4050

  2. Rs. 5430

  3. Rs. 6270

  4. Rs. 7200

  5. Rs. 7100
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

CI = P((1+r)^n - 1). 7416 = P((1.06)^2 - 1) = P(0.1236). P = 7416 / 0.1236 = 60000. SI = P * R * T = 60000 * 0.06 * 2 = 7200.

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