Question

Calculate the difference between the simple interest and the compound interest on Rs. $20,000$ in $2$ years at $8$% per annum compounded yearly.

• A. Rs. $256$
• B. Rs. $128$
• C. Rs. $164$
• D. Rs. $244$

Answer 1

The correct option is B Rs. $128$

$\Rightarrow$ $P=$Rs.$20,000,T=2years$ and $R=8\%$.

$\Rightarrow$ $S.I.=\frac{P\times R\times T}{100}$

$\Rightarrow$ $S.I.=\frac{20000\times 8\times 2}{100}$

$\therefore$ $S.I.=$Rs.$3200$.

$\Rightarrow$ $C.I.=P(1+\frac{R}{100}{)}^T-P$

$\Rightarrow$ $C.I.=20,000\times (1+\frac{8}{100}{)}^2-20,000$

$\Rightarrow$ $C.I.=23,328-20,000$

$\therefore$ $C.I.=$Rs.$3328.$

$\Rightarrow$ $C.I.-S.I=$Rs.$3328-$Rs.$3200=$Rs.$128$.