Discussion

The difference between simple interest and C.I. at the same rate for Rs.5000 for 2 years in Rs.72. The rate of interest is?

Answer: B

Over two years the gap between compound and simple interest is

\[ \text{CI} - \text{SI} = P\left(\frac{R}{100}\right)^{2} \]

\[ 72 = 5000 \times \frac{R^{2}}{10000} = 0.5R^{2} \]

\[ R^{2} = 144 \quad\Longrightarrow\quad R = 12\% \]

Checking: SI = Rs. 1200 and CI = \( 5000(1.2544 - 1) = 1272 \) - exactly Rs. 72 apart.

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