Question

Choose the correct answer from the alternatives given.
The difference between simple and compound interest at the rate of 10% per annum on a sum of 1,000 after 4 years is

• A. $Rs.64.10$
• B. $Rs.31$
• C. $Rs.32.10$
• D. $Rs.40.40$

Answer 1

The correct option is A $Rs.64.10$

$SI=\frac{P\times r\times t}{100}$

$⟹SI=\frac{1000\times 10\times 4}{100}=Rs.400$

$CI=P\left[\right(1+\frac{r}{100}{)}^n-1]$

$⟹CI=1000\left[\right(1+\frac{10}{100}{)}^4-1]=Rs.464.10$

Difference$=CI-SI=RS.464.10-Rs.400=Rs,64.10$