The difference between compound interest and simple interest at the same rate on Rs 5000 for 2 years is Rs 72. The rate of interest per annum is: A. 6% B. 8% C. 10% D. 12% Answer Workspace Report Discuss Answer with explanation Answer: Option D Explanation Let the rate be r % p.a, Then S. I = Rs (5000 × r/100 × 2) = Rs (100r) C. I = Rs[5000 × (1 + r/100) 2 – 5000] = Rs {5000 × [(1 + r/100) 2 – 1]} = Rs [5000 × (r2/2 + r/50)] = Rs (r2 /2 + 100r) (C.I) – (S.I) = (r2/2 + 100r) – (100r) = r2/2 Therefore, r2/2 = 72 => r2 = 144 => r = 12 Hence, Rate = 12 % p.a Workspace
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