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Simple interest on a certain sum of money for 3 years at 14% per annum is half the compound interest on Rs 10000 for 2 years at 10% per annum. The sum placed on simple interest is:

  1. A
    Rs 5000
  2. B
    Rs 1250
  3. C
    Rs 2000
  4. D
    Rs 2500

Solution & Step-by-step Explanation

First, let us find the compound interest (CI) on Rs 10000 for 2 years at 10% per annum.
Amount (A)=P(1+
100
R

)
t

A=10000(1+
100
10

)
2
=10000×(
10
11

)
2

A=10000×
100
121

=12100
CI=A−P=12100−10000=Rs 2100
According to the question, the simple interest (SI) is half of this compound interest:

SI=
2
1

×2100=Rs 1050
Now, we calculate the principal sum (P
SI

) placed under simple interest for T=3 years at R=14% per annum:

SI=
100
P
SI

×R×T


1050=
100
P
SI

×14×3


1050=
100
42⋅P
SI




P
SI

=
42
1050×100

=
42
105000

=2500
The sum placed on simple interest is Rs 2500.

Practice this question

Try it yourself before checking the explanation above.

Simple interest on a certain sum of money for 3 years at 14% per annum is half the compound interest on Rs 10000 for 2 years at 10% per annum. The sum placed on simple interest is:
A
Rs 5000
B
Rs 1250
C
Rs 2000
D
Rs 2500

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