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At 5% per annum for 2 years, compound interest (compounded annually) on a sum is ₹45 more than simple interest. What is the sum (in ₹)?

Competition practiceSimple & Compound Interest

A18000
B9000
C1800
D36000

Step-by-Step Solution

For 2 years, CI − SI =

P \times (R /100)^{2} = P \times 0.0025

. So

0.0025 P = 45

and

P

= ₹18,000.

Answer: A) 18000

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