If the difference between compound interest and simple interest on Rs. 15,000 over 2 years is Rs. 96, what is the annual rate of interest?

Explanation

The difference between compound interest and simple interest for 2 years is given by the formula: (P × R²) / 100², where P is the principal and R is the rate of interest. Using the values, (15000 × R²) / 10000 = 96, which simplifies to 1.5 × R² = 96, so R² = 64 and R = 8%. Therefore, the rate of interest per annum is 8%.