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    Question

    The difference between compound interest and simple

    interest on a sum of Rs 8,000 for 2 years at the same rate is Rs 20. Find the rate of interest per annum.
    A 9% Correct Answer Incorrect Answer
    B 2% Correct Answer Incorrect Answer
    C 5% Correct Answer Incorrect Answer
    D 11% Correct Answer Incorrect Answer

    Solution

    Let rate = r% per annum. For 2 years, difference (CI тИТ SI) = P ├Ч (r/100)┬▓ Given: 20 = 8000 ├Ч (r/100)┬▓ 20 = 8000 ├Ч r┬▓ / 10,000 20 = (4/5) r┬▓ r┬▓ = 20 ├Ч (5/4) = 25 r = 5% per annum.

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