Multiple choice

The compound interest on a certain sum of money for 2 years at 10% per annum is Rs. 420. Find the simple interest at the same rate and for the same time.

  1. Rs. 400

  2. Rs. 500

  3. Rs. 450

  4. Rs. 550

  5. None of these
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A Correct answer
Explanation

Let P = Rs. x, T = 2 years, R = 10% p.a, and CI = Rs. 420.
Then, A = P(1 + R/100)n A = x(1 + 10/100)2 A = x(11/10)2 A = 121x/100 Because CI = A - P 420 = 121x/100 - x x = 2000 Now, SI = (P * R * T)/100 = (2000 * 10 * 2/100) = Rs. 400 Therefore, the required interest is Rs. 400.

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