Question

If the compound interest on a certain sum for two years at $5\%$ p.a. is Rs $1,100$ the simple interest on it at the same rate for two years will be.

• A. Rs. $1250$
• B. Rs. $2150$
• C. Rs. $2200$
• D. Rs. $2300$

Answer 1

The correct option is C Rs. $2200$

Given, rate $r=5\%$, $n=2$ years, compound interest $=$ Rs. $1100$

Compound interest $=$ Amount$-$ Principal
Therefore, $1100=P{(1+\frac{5}{100})}^2-P$
$\Rightarrow 1100=P(1.05{)}^2-P$
$\Rightarrow 1100=1.1025P-P$
$\Rightarrow P=\frac{1100}{0.05}$
$\Rightarrow P=$ Rs. $22000$
Simple interest $=$ $\frac{\text{PRT}}{100}$
$=$ $\frac{22000\times 5\times 2}{100}$
Simple interest $=$ Rs. $2200$