Question

The compound interest on a certain sum of the money at $5\%$per annum for 2 years is Rs. 328. What will be simple interest on the same amount for the same period and at same rate of interest?

• A. Rs. 320
• B. Rs. 380
• C. Rs. 420
• D. Rs. 440

Answer 1

The correct option is A

Rs. 320

Let the principal be Rs. 100

R = $5\%$ and time = 2 years

S.I= $\frac{PTR}{100}$

= $\frac{(100\times 2\times 5)}{100}$

= Rs.10

Compound interest= $p{\left(\frac{1+R}{100}\right)}^n-p$

= $100{\left(\frac{1+5}{100}\right)}^2-100$

= $(100\times \frac{21}{20}\times \frac{21}{20})-100$

= $\frac{441}{4}-100$

= Rs.$\frac{41}{4}$

$Now,ifC.IisRs.\frac{41}{4},simpleinterest=Rs.10$

$IfC.IisRs.328,simpleinterest=Rs.\left\{\frac{(10\times 4)}{41}\right\}\times 328$

= Rs. 320