Multiple choice

A certain sum of money when invested separately over a period of 2 years gives simple interest and compound interest as Rs.200 and Rs.210 respectively. Find the rate of interest?

  1. 15%

  2. 12%

  3. 10%

  4. 20%

  5. None
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

SI for 2 years = 200, so SI for 1 year = 100. CI for 2 years = 210. The difference is the interest on the first year's interest: 210 - 200 = 10. Rate = (10 / 100) * 100 = 10%.

AI explanation

The difference between compound interest and simple interest for two years is given by the formula Difference = P * (R/100)^2. Since the simple interest for two years is Rs. 200, the simple interest for one year is Rs. 100, meaning the principal is 100 * (100/R). Substituting this into the difference formula gives 10 = [100 * (100/R)] * (R/100)^2, which simplifies to R = 10%.

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