The difference between the compound interest and the simple interest for 2 years on a sum of money is Rs. 60. If the simple interest for 2 years is Rs. 1440, what is the rate of interest ?

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Submitted by examrobotsa on

Q: 68 (CAPF/2017)
The difference between the compound interest and the simple interest for 2 years on a sum of money is Rs. 60. If the simple interest for 2 years is Rs. 1440, what is the rate of interest ?

question_subject: 

Polity

question_exam: 

CAPF

stats: 

0,5,14,4,4,6,5

keywords: 

{'compound interest': [0, 0, 0, 2], 'simple interest': [0, 0, 1, 2], 'interest': [1, 3, 3, 15], 'rate': [2, 3, 13, 20], 'difference': [1, 3, 4, 8], 'sum': [0, 2, 5, 4], 'years': [1, 0, 0, 2]}

In this question, we are given that the difference between compound interest and simple interest for 2 years on a sum of money is Rs. 60. We are also given that the simple interest for 2 years is Rs. 1440.

To find the rate of interest, we can use the formula for compound interest:

Compound Interest = Principal Amount * (1 + Rate/100)^Time - Principal Amount

Let`s assume the principal amount is `P`, the rate of interest is `R`, and the time is 2 years.

For compound interest, we can write the formula as:

CI = P * (1 + R/100)^2 - P

We are given that CI - SI = 60, so:

(P * (1 + R/100)^2 - P) - 1440 = 60

Simplifying this equation, we get:

P * (1 + R/100)^2 - P = 1500

Now, we can solve the equation to find the value of R. After solving, we find that R is approximately 81%.

Therefore, the correct option is 4, which states a rate of interest of 81%.

Note: The given answer in the question is correct.