Question

If the difference between the compound interest and simple interest on a sum of money is Rs. 32 at a rate of 5% pa for 2 yr. What is SI?
1. 640
2. 1200
3. 1280
4. 1240

Answer 1

Correct Answer - Option 3 : 1280

Given:

Difference between CI and SI (D) = 32

Rate (R) = 5% pa

Time (T) = 2 yr

Formula Used:

For 2 yr time the difference between CI and SI (D) = SI/200 × R

Calculations:

CI – SI (D) = 32, R = 5%

According to the formula,

⇒ D = SI/200 × R

⇒ 32 = SI/200 × 5

⇒ SI = (32 × 200)/5

⇒SI = 1280.

∴ The Simple interest is Rs. 1280.