Amir borrowed a sum of Rs. 25,000 on simple interest. Bhola borrowed the same amount on compound interest (interest compounded yearly). At the end of 2 years, Bhola had to pay Rs. 160 more interest than Amir. The rate of interest charged per annum is:

Amir borrowed a sum of Rs. 25,000 on simple interest. Bhola borrowed t

1.	Amir borrowed a sum of Rs. 25,000 on simple interest. Bhola borrowed the same amount on compound interest (interest compounded yearly). At the end of 2 years, Bhola had to pay Rs. 160 more interest than Amir. The rate of interest charged per annum is:
A.	8%
B.	\(3\frac{1}{8}\% \;\)
C.	16/25%
D.	8/25%
Answer» B. \(3\frac{1}{8}\% \;\)

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Amir borrowed a sum of Rs. 25,000 on simple interest. Bhola borrowed the same amount on compound interest (interest compounded yearly). At the end of 2 years, Bhola had to pay Rs. 160 more interest than Amir. The rate of interest charged per annum is:

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