Question

A man invested Rs. 16,000 at a simple interest rate of 8% per annum for 2 years. Had he invested the sum at a compound interest rate of 8% per annum for the same period, how much more would be have earned?

• A. Rs. 102.40
• B. Rs. 201.85
• C. Rs. 100
• D. Rs. 95.81

Answer 1

Answer: (A)

Rs. 102.40

Simple interest=$\frac{16000\times 8\times 2}{100}=2560$Rs
Compound interest=$16000{(1+\frac{8}{100})}^2-16000=16000{\left(\frac{27}{25}\right)}^2-16000=\frac{16000\times 729}{625}-16000=18662.40-16000=2662.40$Rs
Diff of intt.=2662.40-2560=102.40 Rs