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Difference between CI and SI

CMAT 2021 · Quantitative Techniques & Data Interpretation · Easy · Simple and Compound Interest

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The difference between the compound interest and simple interest for the amount Rs 5000/- in 2 years is Rs. 32. Then the rate of interest per annum is:

  1. A.

    5%

  2. B.

    8%

  3. C.

    10%

  4. D.

    12%

Answer

B

Explanation

The formula for the difference between CI and SI for 2 years is: Diff=P(R100)2\text{Diff} = P \left(\frac{R}{100}\right)^2

Given Diff = 32 and P=5000P = 5000: 32=5000(R100)232 = 5000 \left(\frac{R}{100}\right)^2 325000=R210000\frac{32}{5000} = \frac{R^2}{10000} R2=32×100005000=64R^2 = \frac{32 \times 10000}{5000} = 64 R=8%R = 8\%

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