Question

If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what is the compound interest on the same sum at the same rate and for the same time?

• A. Rs, 51.25
• B. Rs. 52
• C. Rs. 54.25
• D. Rs. 60

Answer 1

The correct option is A Rs, 51.25

Let the sum=P Rs.
S.I=50 Rs.
Rate of interest=5 %
Time =2 years.
$S.I=\frac{P\times R\times T}{100}$
$50=\frac{P\times 5\times 5}{100}$
$P=\frac{50\times 100}{5\times 2}=500Rs.$
C.I. of 500 Rs
$Amount=500(1+\frac{5}{100}{)}^2$
$\Rightarrow 500\times \frac{105}{100}\times \frac{105}{100}$
$\Rightarrow 500\times \frac{21}{20}\times \frac{21}{20}$
$\Rightarrow 551.25$
$C.I=551-500-51.25Rs.$