On a sum of money, the simple interest for 2 years is Rs. 320, while the compound interest is Rs. 340, the rate of interest being the same in both the cases. The rate of interest is  Choose the correct choice from the following choices.
A) 15 %
B) 14.25 %
C) 12.5 %
D) 10.5 %
E) 11.5 %

Rationale: explanation : - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - solution 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - simple interest for 2 years is rs . 320 = > simple interest for first year = 320 / 2 = 160 = > similarly , simple interest for second year is also 160 compound interest for first year = 160 compound interest for second year = 340 - 160 = 180 we can see that compound interest for second year is more than simple interest for second year by 180 - 160 = 20 i . e . , rs . 20 is the simple interest on rs . 160 for 1 year r = 100 × si / pt = ( 100 × 20 ) / ( 160 × 1 ) = 12.5 % - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - solution 2 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - the difference between compound interest and simple interest on rs . p for 2 years at r % per annum = ( r × si ) / ( 2 × 100 ) difference between the compound interest and simple interest = 340 - 320 = 20 ( r × si ) / ( 2 × 100 ) = 20 ( r × 320 ) / ( 2 × 100 ) = 20 r = 20 × 100 × 2320 = 12.5 % answer : option c
Answer: C