If the compound interest of a certain sum of money for 2 years at 5 % p.a. is Rs. 328. what will be the simple interest on the same time and at the same rate?
Correct Answer: Rs. 320
Explanation:
∵ 328 = Principal {(1 +5/100)2 - 1}
⇒ 328 = Principal (441/400 - 1)
⇒ 328 =Principal 41/400
⇒ Principal = (328 x 400)/41 = Rs. 3200
∴ Simple interest = (3200 x 5 x 2) / 100 = Rs. 320
