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If the difference between the compound interest and the simple interest on a sum of money is 0.0625 times of itself in 2 years. What is the rate of interest?
  • a)
    10%
  • b)
    25%
  • c)
    50%
  • d)
    62.5%
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
If the difference between the compound interest and the simple interes...
The formula for CI at annual compound interest, including principal sum, is:
Here n = 1
0.0625P = P(1 + r/100)2 - P - (P × r × 2)/100
(1 + r/100)2 - r/50 = 1.0625
r = 25%
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If the difference between the compound interest and the simple interest on a sum of money is 0.0625 times of itself in 2 years. What is the rate of interest?a)10%b)25%c)50%d)62.5%Correct answer is option 'B'. Can you explain this answer?
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