Discussion
If simple interest for 2 years for a sum is Rs. 600 and compound interest for the same sum for 2 years and same rate of interest is Rs. 645, what will be the rate of interest?
Answer: B
Simple interest of Rs. 600 over two years means Rs. 300 in each year. Compound interest exceeds it by
\[ 645 - 600 = \text{Rs. } 45 \]
and that excess is one year's interest on the first year's Rs. 300:
\[ 300 \times \frac{R}{100} = 45 \quad\Longrightarrow\quad R = 15\% \]
The principal is never needed. This shortcut works for any two-year simple-versus-compound comparison.
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