What is the difference (in Rs) between the simple interest and the compound interest on a sum of Rs 8000 for 2years at the rate of 10% p.a., when the interest is compounded yearly?
Show answer & explanation
Correct answer: A
Explanation
The correct answer is option 1 i.e. 147.20.
Principal = 8000 , Rate = 10% and time = 12/5 years
SI = (P × R × T)/100
SI = (8000 × (12/5) × 10)/100 = 1920
CI = P(1 + R/100)T - P
CI = 8000(1 + 10/100)2 × (1 + 4/100) - 8000 [ i.e., 10 × (2/5) = 4% ]
CI = (10067.2 - 8000) = 2067.2
Required difference = (2067.2 - 1920) = 147.20