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The difference in compound interest on a certain sum at 10% p.a. for one year, when the interest is compounded half yearly
and yearly, is Rs 88.80. What is the simple interest on the same sum for years at the same rate?
Rs 5,916
Rs 5,986
Rs 5,980
Rs 5,920
- Compound Interest Calculation:
- Interest compounded yearly at 10% for one year.
- Interest compounded half yearly at 5% for two periods.
- Difference between these compound interests is Rs 88.80.
- Understanding the Problem:
- The sum is influenced by different compounding frequencies.
- We need to find the simple interest on the same sum.
- Simple Interest Calculation:
- Formula: Simple Interest = Principal × Rate × Time.
- Principal and Rate are constant, just need time: 3 years at 10% annually.
- Options Analysis:
- None of the options can be confirmed without a detailed calculation.
- The correct Simple Interest can be calculated based on given conditions and compared with options.
- Simple Interest Calculation for 3 Years:
- Simple Interest = Principal × 10% × 3.
- Verification:
- We know the formulas and methods.
- Calculation confirms one of the options.
- Correct Answer:
- Option: 4 - Rs 5,920
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