The compound interest on a certain sum of money at 5% per annum for 2 years is Rs. 246. The simple interest on the same sum for 3 years at 6% per annum is
Solution
Correct Answer: Option D
Let the principal is = P
We know the formula for compound interest-
\(A = P{\left( {1 + \frac{R}{{100}}} \right)^T}\)
Where,
A = Amount
P = Principal
R = Rate of interest = 5%
T = Time period = 2 yr
C.I. = A – P
\(246 = P{\left( {1 + \frac{5}{{100}}} \right)^2} - P\)
⇒ 246 = P (441/400) - P
⇒ P = 2400
We know the formula for simple interest-
\(S.I. = P \times R \times \frac{T}{{100}}\)
Where:
S.I. = simple interest
P = principal
R = rate = 6%
T = time = 3 yr
S.I. = (2400 × 3 × 6)/100
S.I. = 432
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