Discussion
The simple interest accrued on an amount Rs.10,000 at the end of two years is same as the compound interest on Rs.8,000 at the end of two years. The rate of interest is same in both the cases. What is the rate of interest?
Answer: D
Given that Rs.10,000 is invested in S.I for two years and Rs.8,000 in C.I for two years
=> C.I - S.I
=> 8,000 { [1 + r/100]2 - 1} = (10,000)2r /100
=> 8{ 1 + 2r/100 + r2 / (100)2 - 1} = r/5
=> 16r/100 + 8r2/(100)2 = 20r/100
=> 4r/10 = 8r2/(100)2
=> 8[r/100]2 - 4r/100 = 0
=> r/100 {8r/100 -4} = 0
=> r = 0% of 50%
Since r!= 0%, r =50%
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