Question

Find the difference between compound interest and simple interest on an amount of ₹ 15,000 for 2 years at 8 % per annum.

• A. ₹ 86
• B. ₹ 46
• C. ₹ 96
• D. ₹ 1296

Answer 1

The correct option is C

₹ 96

Given P = ₹ 15000, T = 2 years and R = 8%

Simple Interest = $\frac{P\times T\times R}{100}$

= $\frac{15000\times 2\times 8}{100}$

= ₹ 2400

C.I. for the first year

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

= $\frac{15000\times 1\times 8}{100}$

= ₹ 1200

Principal for the second year

= 15000 + 1200

= ₹ 16200

C.I. for second year

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

= $\frac{16200\times 1\times 8}{100}$

= ₹ 1296

Total C.I. for two years = ₹ 1200 + 1296

= ₹ 2496

Difference between C.I. and S.I.
= ₹ 2496 - ₹ 2400
= ₹ 96