On a certain sum of money the simple interest for 2 years is Rs150 at the rate of 10 per annum What ...........

Quantitative Aptitude (MTS) Simple Interest

On a certain sum of money, the simple interest for 2 years is Rs150 at the rate of 10% per annum. What is the difference

between the compound interest and the simple interest for 2 years if, in the case of compound interest, interest is compounded

annually at the rate of 10% per annum.

This questions was previously asked in

SSC MTS 12th July 2022 Shift-2

Rs5

Rs10

Rs7.5

Rs12.5

- First, calculate the principal amount using simple interest formula:

$$ \text{Simple Interest} = \frac{\text{Principal} \times \text{Rate} \times \text{Time}}{100} $$

Here, $150 = \frac{P \times 10 \times 2}{100}$.

Solving gives $P = 750$.

- For compound interest, use the formula:

$$ \text{Compound Interest} = P \times \left(1 + \frac{R}{100}\right)^T - P $$

Substituting values, $$ 750 \times \left(1 + \frac{10}{100}\right)^2 - 750 = 157.5 - 750 $$

So, Compound Interest is Rs157.5.

- Difference between Compound and Simple Interest:

$$ 157.5 - 150 = 7.5 $$

- The correct option is Option: 3, Rs 7.5.

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