Question

Find the difference between compound interest and simple interest on an amount of ₹ 20,000 for 2 years at 8 % per annum

• A. ₹ 136
• B. ₹ 148
• C. ₹ 128
• D. ₹ 152

Answer 1

The correct option is C

₹ 128

Given P = ₹ 20,000 , T = 2 years R = 8 %

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

= $\frac{20,000\times 2\times 8}{100}$

= ₹ 3200

C.I for the first year

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

= $\frac{20,000\times 1\times 8}{100}$

= ₹ 1600

Principal for the second year

= 20,000 + 1600

= ₹ 21,600

C.I for second year

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

= $\frac{21,600\times 1\times 8}{100}$

= ₹ 1728

Total C.I for two years = ₹ 1600 + 1728

= ₹ 3328

Difference between C.I and S.I = 3328 - 3200

= ₹ 128