Question

If $400$ dollars is deposited in a bank account for $4$ years at $8\%$ per annum. Compare interest using simple interest formula and compound interest formula

• A. CI $=144.195$
• B. S1 $=200$
• C. C1 $>$ S1
• D. SI $<$CI

Answer 1

Answer: (A), (C)

The correct options are
A CI $=144.195$
C C1 $>$ S1

Simple Interest $=$ $\frac{(P\times R\times T)}{100}$
Principal amount $=$ Rs. $400$
Time $=$ $4$ years
Rate $=$ $8$ $\%$
Simple Interest
$=$ $\frac{(400\times 4\times 8)}{100}$
$=$ Rs. $128$
Amount $=$ $P\times (1+0.01\times R{)}^n$
$=$ $400\times (1+0.01\times 8{)}^4$
$=$ Rs. $544.195$
Compound Interest $=$ $544.195-500$
$=$ Rs. $144.195$