Simple interest on a principal at 8% per annum for 3 years is half the compound interest on Rs. 4000 for 2 years at 10% per annum. Find the simple interest sum:_______?
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Answer: C. Rs. 1750
Explanation
Calculating the compound interest on four thousand for two years at ten percent yields eight hundred forty. Taking half of this compound interest amount gives four hundred twenty as the required simple interest target. Setting simple interest equal to four hundred twenty at an eight percent rate for three years solves for a principal of seventeen hundred fifty. Compound interest calculates interest on both the initial principal and accumulated interest from previous periods. Simple interest calculates returns solely on the initial principal amount across all participating time periods. Algebraic equations allow financial figures to be equated across different interest calculation methodologies.
Option A produces a simple interest amount that falls below the required half-compound target. Option B results in an interest calculation that does not match the exact target of four hundred twenty. Option D overshoots the required principal amount when tested against the simple interest formula.
- Subject
- Mathematics
- Category
- Mathematics
- Topic
- —
- Difficulty
- medium
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