# If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50

If the simple interest on a sum of money for 2 years at 5% per annum is Rs. 50. What will be the compound interest on the same sum at the same rate for the same period?

(a) Rs.51.25

(b) Rs.52.00

(c) Rs.54.25

(d) Rs.60.00

**Answer: (a) Rs. 51.25**

**Solution:-**

According to the question,

Principal = (50 x 100/2 x 5)

= Rs. 500

Amount = [500 x (1 + 5/100)^2]

= 500 x 21 x 21 /20 x 20

= Rs. 551.25

Then, compound Interest = 551.25 – 500

= Rs. 51.25.

Hence, the correct answer is option (a) Rs. 51.25.