Multiple choice

The difference between the compound interest and the simple interest for the amount Rs. 5,000 in 2 years is Rs. 32. Then the rate of interest per annum is:

  1. 5%

  2. 8%

  3. 10%

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

Difference = P * (R/100)^2. 32 = 5000 * (R/100)^2. 32/5000 = (R/100)^2. 0.0064 = (R/100)^2. R/100 = 0.08. R = 8%.

AI explanation

The formula for the difference between compound interest and simple interest for two years is Difference equals P times R squared divided by 10000. Substituting the given values results in 32 equals 5000 times R squared divided by 10000, which simplifies to 32 equals R squared divided by 2. Solving for R squared gives 64, so the rate of interest per annum is 8%.

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