Multiple choice

If on any amount, Simple Interest for 2 years is Rs. 100 and Compound Interest is Rs. 104. What will be interest rate?

  1. 2%

  2. 3%

  3. 4%

  4. 8%
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D Correct answer
Explanation

Simple interest for 2 years is 100, so SI for 1 year is 50. Compound interest for 2 years is 104, meaning the extra 4 is the interest on the first year's interest (50). Rate = (4/50) * 100 = 8%.

AI explanation

The simple interest per year is 50, and the difference between compound and simple interest for two years is 4, which is the interest earned on the first year's interest. The rate is calculated as 4 divided by 50 multiplied by 100, yielding 8%. The result is 8%.

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