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Question:

If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50, what is the compound interest on the same at the same rate and for the same time?

Explanation:

Sum = Rs. $\frac{50 \times 100}{2 \times 5} =$ Rs. 500

Amount = Rs. $[500 \times {(1 + \frac{5}{100})}^{2}]$

C.I. = Rs. (551.25 - 500) = Rs. 51.25

Hence, option (a).

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