Question

Suman deposited Rs. 6400 at 20% compound interest and Rs. 5840 at 15% simple interest for 2 years each. The difference between the compound interest and simple interest earned by Suman is____.

• A. Rs. 1122
• B. Rs. 1064
• C. Rs. 1048
• D. Rs. 1164
• E. Rs. 1012

Answer 1

The correct option is B Rs. 1064

Compound interest earned by Suman = 6400 × [(1 + 0.2)² – 1] = 6400 × 0.44 = Rs. 2816

Simple interest earned by Suman = 5840 × 0.15 × 2 = Rs. 1752

Required difference = 2816 – 1752 = Rs. 1064

Hence, option B is correct.