A deposited ₹1,56,250 at 8% simple interest for 2 years. How much more money will A have in his account at the end of two years if, at the same rate of interest, the sum is invested in compound interest, compounded annually?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. ₹1,000.
Difference = (PR2)/1002 = (156250 × 8 × 8)/1002 = 1000
Hence, A will have ₹1,000 more in his account at the end of two years if the sum is invested in compound interest.