The difference between the compound interest (compounded annually) and the simple interest on a sum of ₹5000 at a certain rate of interest for 2 years is ₹112.5. The rate of interest per annum is:
Answer & explanation
Correct answer: option 2
Difference b/w CI and SI for 2 years = Principal × R% × R%
⇒ 112.5 = 5000 × \(\frac{R^2}{10000}\)
⇒ R2 = 225
⇒ R = 15%