Question

The difference between simple interest and compound interest for 2% years is Rs 96.80. If the principal is Rs 8,000, find the rate of interest

• A. 12%
• B. 13%
• C. 11%
• D. 10%

Answer 1

The correct option is C 11%

$P=8,000;t=2;n=2;r=?$
$CI-SI=96.80$
or $8,000{(1+\frac{r}{100})}^2-8,000-\frac{8,000\times 2\times r}{100}=96.80$
or $8,000[{\left(\frac{100+r}{100}\right)}^2-1-\frac{2}{100}r]=Rs96.80$
or $r^2=\frac{96.80\times 10,000}{8,000}=121$
$\therefore r=11$%