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Question

The difference between the compound interest and the simple interest on a sum of money for 2 years at 10% per annum is Rs. 200. The sum is

A

2000

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B

1000

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C

20000

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D

10000

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Solution

The correct option is C

20000


Let P be the sum.
Compound interest = p[(1+x100)n1], where n is the number of years and x is the interest rate.
CI=P[(1+10100)n1]
CI=P(1.121)
CI=P(1.211)=0.21P
Simple interest P×n×x100=P×2×10100=0.2P
Given, Difference between compound interest and simple interest is Rs.200
0.21P - 0.2P = 200
0.01P = 200 P = 2000.01 = Rs. 20000


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