Multiple choice

The difference between the compound interest (compounded annually) and the simple interest on a sum of money, deposited for 2 years at 5% per annum, is Rs. 15. What is the sum of money deposited?

  1. Rs. 6000

  2. Rs. 4800

  3. Rs. 3600

  4. Rs. 2400
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A Correct answer
Explanation

For 2 years, difference = P * (R/100)^2. 15 = P * (5/100)^2. 15 = P * (1/20)^2 = P / 400. P = 15 * 400 = 6000.

AI explanation

Using the direct formula for the difference between compound interest and simple interest for two years, we have Difference = P multiplied by (R divided by 100) squared. Substituting the given values, we get 15 = P multiplied by (5 divided by 100) squared, which simplifies to 15 = P multiplied by 0.0025. Solving for P gives 15 divided by 0.0025, resulting in a principal amount of Rs. 6000.

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