Question

If the simple interest for a certain investment is ₹ 240 for the first year, then the compound interest for the same will be ___________.

• A. ₹ 420
• B. ₹ 120
• C. ₹ 240
• D. ₹ 480

Answer 1

The correct option is C ₹ 240

For simple interest,
A = P( 1 + TR)
For 1 year
A= P(1 + R)

For compound interest,

$A=P(1+R{)}^n$
A= P(1 + R)
For the first year, the simple interest and the compound intersest are the same.
So, for a given P and R the simple and the compound interest are the same for the first year.

Therefore, compound interest = ₹ 240