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Question 66
If the compound interest on a certain sum of money for 2 years at 4% per annum compounded annually is Rs. 102, then the simple interest on the same sum of money at the same interest rate and for the same period is
Solution
Let principal sum = Rs. $$x$$
Rate of interest = 4% for 2 years
Compound interest = $$P[(1+\frac{r}{100})^t-1]$$
=> $$P[(1+\frac{4}{100})^2-1]=102$$
=> $$P[(\frac{26}{25})^2-1]=102$$
=> $$P(\frac{676-625}{625})=102$$
=> $$P=625\times2=Rs.$$ $$1250$$
$$\therefore$$ Simple interest = $$\frac{P\times r\times t}{100}$$
= $$\frac{1250\times4\times2}{100}=Rs.$$ $$100$$
=> Ans - (B)
