Question

Suresh lends a certain sum of money to his friends at 10% per annum for compound years for 2 years. After 2 years He would gain an interest in Rs.504. Then find the simple interest on the same sum for 4 years at 6% per annum. 

1. 576
2. 476
3. 500
4. 423

Answer 1

Correct Answer - Option 1 : 576

Given:

Rate of interest in 1st condition = 10% per annum

compound interest = Rs 504 

Formula Used: 

Simple Interest = principal × time × Rate/100

Amount = P(1 + r/100)^t

Calculation:

⇒ R = 10% = 1/10

Time	Principal	Amount
1st year	10x	11x
2nd year	10x	11x
Total	100x	121x

⇒ C.I. = 504 

⇒ 121x – 100x = Rs 504 

⇒ x = 24 

⇒ principal = 100x = 24 ×100 = Rs 2400 

⇒ S.I. = (2400 × 4 × 6)/100 

⇒ S.I. = Rs. 576

∴ The simple Interest is Rs. 576