Question

If the difference between S.I. and C.I. is $Rs.25$ on $1000$ for $2$ years then what is rate of interest?

• A. $6$
• B. $4$
• C. $5$
• D. $3$

Answer 1

Answer: (C)

$5$

Using the formula: Difference $=P{\left(\frac{R}{100}\right)}^n$

$25=10000\times {\left(\frac{R}{100}\right)}^2$

$25=10000\times \frac{R}{100}\times \frac{R}{100}$

$25=R^2$

$R^2=25$

$\therefore R=5$

Hence rate of interest is $5\%$