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 ₹72. The rate of interest per annum is:
Answer & explanation
Correct answer: option 1
Difference b/w CI and SI for 2 years = Principal × R% × R%
⇒ 72 = 5000 × \(\frac{R^2}{10000}\)
⇒ R2 = \(\frac{720}{5}\) = 144
⇒ R = 12%