Find the difference between the simple interest and the compound interest payable annually on a sum of Rs. 6,500 at 7% per annum for 3 years. (Correct to two decimal places.)
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2 i.e. Rs. 97.78.
We know that,
C.I. - S.I. = (P × R2)/(3 + r/100) × 1002
Now, according to the question
Difference = (6500 × 49)/((3 + 7/100) × 1002)
Difference = (65 × 49)/(100 × (307/100))
Difference = Rs. 97.78
Thus,
The difference between simple interest and compound interest is Rs. 97.78.