Question 97

If in 2 years at simple interest the principal increases by 16%, what will be the compound interest earned (in Rs) on Rs 25,000 in 2 years at the same rate?

Solution

Let the rate be r% and principle be p .

So, According to question,

$$0.16p=p\times\frac{r}{100}\times2$$

or, $$r=8\ \%\ .$$

So, C.I= $$25000\left(1+0.08\right)^2-25000=4160\ Rs.$$

D is correct choice.

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