The compound interest on a certain amount for 2 years at the rate of 10 p.c.p.a is Rs. 630. What will be the simple interest on the same amount and at the same rate and same time?
Solution
Correct Answer: Option B
We have R = 10% p.a.
T = 2 years
CI = 630
We have the formula for CI as
\({\rm{CI\;}} = {\rm{\;P}}{\left( {1 + \frac{R}{{100}}} \right)^2}-{\rm{\;P}}\)
Where, CI = compound Interest
P = Principal Amount
R = rate of interest
T = time period
⇒ CI = P(1+10/100)2 – P
⇒ 630 = P× 1.1 × 1.1 – P
⇒ 630 = P(1.21 – 1)
⇒ P = 630/0.21
⇒ P = 3000
Now, we need to find the simple interest.
SI = (P × R× T) / 100
SI = (3000 × 2 × 10) / 100
SI = Rs. 600
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