If the compound interest on a sum for 2 years at 5% per annum is Tk. 510, the simple interest on the same sum at the same rate for the same period of time is:

If the compound interest on a sum for 2 years at 5% per annum is Tk. 510, the simple interest on the same sum at the same rate for the same period of time is:

A Tk. 400

B Tk. 450

C Tk. 460

D Tk. 480

Solution

Correct Answer: Option D

we know A=P(1+r/100)n

A=principle+interest

let principle=x

we get,

x+510=x(1+12.50/100)2

x=1920

again, I=pnr

=1920×2×12.50/100

=480