If the ratio between Simple interest of 2 years and the Difference between Compound interest to simp...........

Quantitative Aptitude(IBPS CL) Compound Interest

If the ratio between Simple interest of 2 years and the Difference between Compound interest to simple interest of 2 years is 40 : 1. Find out the rate of interest per annum.

This questions was previously asked in

IBPS Clerk Prelims

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10%

25%

12.5%

None of the above

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Explanation:

- The given problem information includes the ratio between simple interest (SI) for 2 years and the difference between compound interest (CI) and simple interest of 2 years being 40:1.

- SI for 2 years is calculated using the formula SI = P * R * 2 / 100, where P is the principal amount and R is the rate of interest.

- The difference between CI and SI for 2 years can be calculated using the formula CI - SI = P * R² / 100².

- Given the ratio, we have P * R * 2 / 100 : P * R² / 100² = 40 : 1.

- Solving this, R equates to 5%.

The correct answer is Option:1, which is 5%.