1.

The difference between the compound interest and simple interest on Rs. 10,000 for 2 years is Rs. 25. The rate of interest per annum is1). 5%2). 7%3). 10%4). 12%

Answer»

GIVEN, PRINCIPAL P = RS. 10,000 and Time period, T= 2 years

Let the rate of INTEREST per annum be R%.

Formula used:

Simple interest, S.I = P × R × T

Compound interest, C.I = P × [(1 + R)T - 1]

∴ S.I = 10000 × R × 2

= Rs. 20000R

And, C.I = 10000 × [(1 + R)2 – 1]

= Rs. (10000R2 + 20000R)

Given that, C.I – S.I = Rs. 25

∴ (10000R2 + 20000R) – 20000R = 25

⇒ R2 = 0.0025

⇒ R = 0.05

∴ R% = 0.05 × 100= 5%

Hence, the rate of interest per annum is 5%.


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