If the compound interest on a certain sum for 2 years at 4% per annum is ₹1530. What would be the simple interest on the same sum for the same period and at the same rate?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. ₹1500.
Compound Interest = Rs. 1530
Rate = 4%
Time = 2 years
C.I. = Principal[(1 + Rate/100)Time - 1]
Simple Interest = (P × T × R)/100
Let the sum be Rs. P.
1530 = P[(1 + 4/100)2 - 1]
1530 = P[(1 + 1/25)2 - 1]
1530 = P[(26/25)2 - 1]
1530 = P[(676/625) - 1]
1530 = P[(51/625]
P = 1530 × (625/51)
P = 18750
So, the sum is Rs. 18750.
Simple Interest = [(18750 × 2 × 4)/100] = 150000/100 = 1500