Question 78
The difference between the compound interest and simple interest for the amount Rs. 5,000 in 2 years is Rs. 32. The rate of interest is
Solution
Now, Compound interest accumulated over a period of 2 years = 5000*(1+x)^2 - 5000
Simple interest accumulated = 5000*x*2
The difference between the two is 32
5000*(1+x)^2 - 5000 - 5000*x*2 = 32
Solving we get the value of x = 0.08
Therefore, the correct option is option B.
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