Question

The compound interest for a certain sum at 5% per annum for the first year is 25. The simple interest for the same money at 5% for two years will be rupees

• A. 40
• B. 50
• C. 60
• D. 70

Answer 1

The correct option is B 50

$\Rightarrow$ We have, $R=5,\%T=1year$ and $C.I.=Rs,2525$

$\Rightarrow$ $CompoundInterest=A-P$

$\Rightarrow$ $CompoundInterest=P(1+\frac{R}{100}{)}^T-P$

$\Rightarrow$ $25=P(1+\frac{5}{100}{)}^1-P$

$\Rightarrow$ $25=P(\frac{21}{20}-1)$

$\Rightarrow$ $P=Rs.500$

$\Rightarrow$ Now, we have to find simple interest for 2 years using same money.

$\Rightarrow$ $S.I=\frac{P\times R\times T}{100}$

$\Rightarrow$ $S.I=\frac{500\times 5\times 2}{100}$

$\therefore$ $S.I.=Rs.50$