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Discussion :: Simple Interest

1.  Mr. Gupta borrowed a sum of money on compound interest. What will be the amount to be repaid if he is repaying the entire amount at the end of 2 years?

I.The rate of interest is 5 p.c.p.a.

II.Simple interest fetched on the same amount in one year is Rs. 600.

III.The amount borrowed is 10 times the simple interest in 2 years.

2.  A. I only B. III only C. I or II only D. II and Either I or III only E. All I, II and III are required  Explanation :

I. gives, Rate = 5% p.a.

II. gives, S.I. for 1 year = Rs. 600.

III. gives, sum = 10 x (S.I. for 2 years).

Now I, and II give the sum.

For this sum, C.I. and hence amount can be obtained.

Thus, III is redundant.

Again, II gives S.I. for 2 years = Rs. (600 x 2) = Rs. 1200.

Now, from III, Sum = Rs. (10 x 1200) = Rs . 12000.

Thus, Rate =$$\frac { 100*1200 } { 2 *12000}$$=5%p.a

Thus, C.I. for 2 years and therefore, amount can be obtained.

Thus, I is redundant.

Hence, I or III redundant.

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