Question

Find the difference between compound interest and simple interest on Rs. 2,500 for 2 years at 4% per annum

• A. Rs. 4
• B. Rs. 3
• C. Rs. 2
• D. Rs. 5

Answer 1

The correct option is A Rs. 4

Given $P=Rs.2,500,r=4$%, $N=2$
$CI=P{(1+\frac{R}{100})}^2-P=2,500{(1+\frac{4}{100})}^2-2,500=2,500(\frac{{104}^2}{{100}^2}-1)=\frac{2,500\times 816}{10,000}=Rs.204$
$SI=\frac{P\times T\times R}{100}=\frac{2,500\times 4\times 2}{100}=Rs.200$
$Difference=Rs.4$