Find the difference between the compound interest and simple interest when a sum of Rs.15,625 is invested for 3 years at 4% per annum.
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 76
Formula used
Difference In CI and SI for 3 years = 3 x P(R)²/(100)² + P (R/100)³
Where P is the principle and R is rate
Calculation
CI - SI = 15625 (4/100)2 * (3 + (4/100))
= 15625 * 76/15625 = 76 Rs