2021 · Q96
The difference of compound interest and simple interest of a sum of money at the rate of 5% per year for 2 years is ₹ 250. The sum is
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- A₹ 1,00,000
- B₹ 80,000
- C₹ 40,000
- D₹ 1,20,000
Explanation
The difference between compound interest and simple interest for two years equals P x (r/100)². With r = 5% and the difference 250, we get 250 = P x 0.0025, so P = 250/0.0025 = 1,00,000. Hence the sum is 1,00,000 rupees.