Find the simple interest on 5,000 at a certain rate if the compound
interest on the same amount for 2 years is 253.125.
a) 250 b) 300 c) *350 d) 400
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compound interest=amount - principal
253.125=A-5000
A=5253.125. equ(1)
but,A=P[1+R/100]^n
5253.125=5000[1+R/100]^2
5253.125/5000=[1+R/100]^2
1.050625=[1+R/100]^2
√1.050625=[1+R/100]
1.025=1+R/100
R/100=1.025-1
R=0.025×100
R=2.5 p.c.p.a
simple interest=PNR/100
S.I=5000×2×2.5/100
S.I=5×2×25
S.I=250
Hemce, a)250 is correct answer
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