The compound interest on a certain sum of money for 2 years at 10% per annum is Rs. 1050. What would be the simple interest on the same sum at the same rate for the same time? MCQ with Answer and Explanation
The compound interest on a certain sum of money for 2 years at 10% per annum is Rs. 1050. What would be the simple interest on the same sum at the same rate for the same time?
A. Rs. 1000
B. Rs. 1040
C. Rs. 1025
D. Rs. 950
Answer: Option A
Solution (By JKSSB Mock Tests)
Effective rate of compound interest for 2 years at 10% = 10 + 10 + (1010)/100 = 21%. Simple interest rate = 10 * 2 = 20%. Given 21% of sum = 1050 => 1% of sum = 50. Simple Interest = 20% of sum = 20 * 50 = Rs. 1000.
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