Simple Interest Ques 8
Question-
What is the approximate equivalent rate of simple interest for 2 years for same interest, if Rs. 12,000 is borrowed at $10 \%$ per annum at compound interest compounded half yearly for one year?
(1) $5 \%$
(2) $9 \%$
(3) $12 \%$
(4) $10 \%$
(5) $11 \%$
(IBPS RRBs Officer Scale-I CWE Main Exam, 13.10.2019)
Show Answer
Correct Answer: (1)
Solution: (1)
Calculated on compound interest,
Amount $=12,000\left(1+\left(\frac{5}{100}\right)\right)^{2}$
$=12000\left(1+\frac{1}{20}\right)^{2}$
$=12000 \times \frac{21}{20} \times \frac{21}{20}$
$=$ Rs. 13230
Compound interest $=13230-12000=$ Rs. 1230
When simple interest $=$ Rs. 1230
So, the equivalent rate of simple interest
$=\frac{\text { Interest } \times 100}{\text { Principal } \times \text { Time }}=\frac{1230 \times 100}{12000 \times 2}$
$=5.125 \approx 5 \%$ per annum
BETA
