Multiple choice

The difference between compound interest and simple interest on a sum for 2 years at the same 6% interest per annum is Rs. 36. Then, that sum (in rupees) is

  1. 10,000

  2. 20,000

  3. 15,000

  4. 18.000
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A Correct answer
Explanation

For 2 years, the difference between compound interest and simple interest is P x (6/100)^2. Setting this equal to 36 gives P = 36/0.0036 = Rs. 10,000.

AI explanation

Using the formula for the difference between compound interest and simple interest for two years, the difference equals the principal multiplied by the square of the rate, divided by 10000. Substituting the given values, 36 equals the principal multiplied by the square of 6, divided by 10000. This simplifies to 36 equals the principal multiplied by 0.0036. Solving for the principal gives a sum of Rs. 10000.

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