The difference between compound interest and simple interest on a sum at 10% per annum for 2 years is Rs 50. The principal amount is:
ARs 5500
BRs 4000
CRs 4500
DRs 5000
Answer & Solution
Correct answer: D. Rs 5000
1. For 2 years, CI − SI = P × (r/100)².
2. Substitute r = 10: difference = P × (10/100)² = P × 0.01.
3. Set 0.01P = 50, so P = 5000.
_Source: RRB Group D (RRC) PYQ, held 27-10-2013, Q.45._