Question

Find the difference between the simple interest and the compound interest for two years on a sum of 28000 at 25% p.a. rate of interest

• A. 1750
• B. 2000
• C. 2250
• D. 3000

Answer 1

The correct option is A 1750

Simple Interest $SI=\frac{PNR}{100}$
So, $SI=\frac{28000\times 2\times 25}{100}=Rs14000$
When interest is compounded, Amount $A=P(1+\frac{R}{100}{)}^n$
So, A $=28000\times (1+\frac{25}{100}{)}^2=Rs43750$
And $CI=A-P=43750-28000=Rs15750$
Si, difference $CI-SI=Rs15750-Rs14000=Rs1750$