Question

The compound interest on a certain sum for 2 years at 5% per annum is Rs. 246. The simple interest on the same sum for double the time and double the rate percent per annum is:

1. Rs. 900
2. Rs. 960
3. Rs. 1000
4. Rs. 1100

Answer 1

Correct Answer - Option 2 : Rs. 960

Given:

Rate of interest = 5%

CI = 246

Time  = 2 years

Formula:

Simple Interest = PRT/100

Compound Interest = P(1 + R/100)n - P

Here, P = Principal, R = Rate, CI = Compound interest, n and t = Time

Calculations:

Compound interest = 246

⇒ P[1 + (5/100)]² – P = 246

⇒ P(441/400) – P = 246

⇒ P(41/400) = 246

⇒ P = (246 × 400)/41 

⇒ P = 2400

SI = (2400 × 10 × 4)/100 = Rs. 960

∴ The Simple interest on the same sum is Rs. 960