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Question
Choose the most appropriate option.
The difference between simple interest and compound interest at the same rate for rupees 5,000 for two years is rupees 98. The rate of interest is:
Options
12%
14%
`10 1/2%`
10%
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Solution
14%
Explanation:
Here,
P = 5000
T = 2 years
Difference between S.I. and C.I. = 98
According to formulas
The difference for 2 years between S.I. and C.I.`="Pr"^2/(100)^2`
`98=(5000xx"r"^2)/(100)^2`
r2 = 196
∴ r = 14
∴ r = 14%
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