Multiple choice

The difference between compound interest and simple interest on Rs. 4,800 for 2 years is Rs. 17.28. What is the rate of interest per annum?

  1. 8%

  2. 6%

  3. 10%

  4. 5%
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Difference = P * (r/100)^2. 17.28 = 4800 * (r/100)^2. 17.28 / 4800 = (r/100)^2. 0.0036 = (r/100)^2. sqrt(0.0036) = 0.06. r = 6%.

AI explanation

Using the formula for the difference between compound interest and simple interest for two years, which is Principal multiplied by Rate squared divided by 10000, we substitute the given values. This gives 17.28 = 4800 multiplied by Rate squared divided by 10000. Solving for Rate squared yields 36, so the rate of interest per annum is 6 percent.

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