Single correct option
A sum invested at 12% per annum, compounded annually, earns Rs 144 more interest over 2 years than the same sum would earn at simple interest. Find the sum.
- A. Rs 8,000
- B. Rs 9,000
- C. Rs 10,000
- D. Rs 11,000
Show answer and solution
Answer: (C) Rs 10,000
For 2 years, CI − SI = P(r/100)². CI in year 2 additionally earns interest on the year-1 interest, which is exactly P×(r/100)² more than SI.
So P × (0.12)² = 144 ⇒ P × 0.0144 = 144 ⇒ P = Rs 10,000.
Check: SI = 10,000 × 0.12 × 2 = 2,400; CI = 10,000 × (1.12² − 1) = 2,544; difference = 144 ✓.
So P × (0.12)² = 144 ⇒ P × 0.0144 = 144 ⇒ P = Rs 10,000.
Check: SI = 10,000 × 0.12 × 2 = 2,400; CI = 10,000 × (1.12² − 1) = 2,544; difference = 144 ✓.
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