The difference between simple interest and compound interest

Home » Aptitude » Compound Interest » Question

The difference between simple interest and compound interest at the same rate for Rs. 5000 for 2 years is Rs. 72.The rate of interest is ?

1. 10%
2. 12%
3. 6%
4. 8%

Correct Option: B

∵ [5000 x (1 +R/100)² - 5000] - (5000 x 2 x R)/100 =72
⇒ 5000[(1 +R/100)² - 1 - R/50] = 72
∴ 1 + R²/10000 + 2R/100 - 1 - R/5 = 72/5000
⇒ R² = (72/5000 x 10000) = 144
∴ R = 12%