If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what will be the compound interest on the same sum at the same rate for the same time? MCQ with Answer and Explanation
If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what will be the compound interest on the same sum at the same rate for the same time?
A. Rs. 50.50
B. Rs. 52.00
C. Rs. 51.25
D. Rs. 53.50
Answer: Option C
Solution (By JKSSB Mock Tests)
Simple Interest for 1 year = 50 / 2 = Rs. 25. Compound interest for 2 years includes the simple interest plus interest on the first year's interest. Extra interest = 5% of 25 = Rs. 1.25. Total compound interest = 50 + 1.25 = Rs. 51.25.
The compound interest on a certain sum of money for 2 years at 6% per annum is Rs. 370.80. What would be the simple interest on the same sum at the same rate for the same time?
Explanation:
Effective rate of compound interest for 2 years at 6% = 6 + 6 + (66)/100 = 12.36%. Simple interest rate = 6 * 2 = 12%. Given 12.36% of sum = 370.80 => 1% of sum = 30. Simple Interest = 12% of sum = 12 * 30 = Rs. 360.
No comments yet. Be the first to start the discussion!