The difference between the simple interests on the principal of ₹500 at an interest rate of 5% per annum for 3 years and 4% per annum for 4 years is:
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. ₹5.
Simple Interest = P × R × T / 100
Simple Interest for 5% per annum for 3 years
Simple Interest 1 = 500 × 5 × 3 / 100 = 7500 / 100 = 75
Simple Interest for 4% per annum for 4 years
Simple Interest2 = 500 × 4 × 4 / 100 = 8000 / 100 = 80
Difference = Simple Interest2 - Simple Interest1 = 80 - 75 = 5
Thus, the difference between the simple interests is ₹5.