Q105
ArithmeticSimple & Compound Interest
If the simple interest on a sum of money for 2 years at 5% per annum is ₹ 50, what is the compound interest on the same sum at the same rate and for the same time?
- a.₹ 51·25
- b.₹ 52
- c.₹ 54·25
- d.₹ 60
Answer: (A) ₹ 51·25
SI of ₹ 50 for 2 years at 5% means the principal is ₹ 500. CI = 500 × (1·05² − 1) = 500 × 0·1025 = ₹ 51·25. The extra ₹ 1·25 is interest on the first year's ₹ 25 interest.