The compound interest on a certain principal at 12½% per annum for 2 years is ₹265.625. What is the simple interest on the same principal for the same time and rate?
Show answer & explanation
Correct answer: A
Explanation
Rate = 12½% = 12.5% = 1/8
CI = P × [2 × 1/8 + (1/8)²]
CI = P × [1/4 + 1/64]
CI = P × [16/64 + 1/64]
CI = P × 17/64
P × 17/64 = 265.625
265.625 = 2125/8
P = 2125/8 × 64/17
P = 1000
Simple Interest -
SI = P × R × T / 100
SI = 1000 × 12.5 × 2 / 100
SI = 250