A man invested Rs. 30,000 each in two separate schemes at 10% p.a. for 4 years. One scheme gives simple interest, while the other gives compound interest, compounded annually. Find the difference between the total interest earned from both.
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Correct answer: D
Explanation
Given:
Principal = ₹30,000
Rate = 10% per annum
Time = 4 years
Formula:
Simple Interest = (P × R × T) / 100
Amount (Compound) = P(1 + R/100)ⁿ
Simple Interest = (30,000 × 10 × 4) / 100 = 12,000
Compound Amount = 30,000(1.1)⁴ = 30,000 × 1.4641 = 43,923
Compound Interest = 43,923 − 30,000 = 13,923
Difference = 13,923 − 12,000 = 1923