Question

The difference between simple interest and compound interest on ₹ $2400$ for one year at $8\%$ per annum compounded half-yearly is ₹ 3.84.

• A. True
• B. False

Answer 1

The correct option is A

True

For Simple Interest

Given P = ₹ 2400, R = 8 % and T = 1 year

S. I = $\frac{PRT}{100}$

= $\frac{2400\times 8\times 1}{100}$ = $₹192$

Interest is compounded half yearly.

Given P = ₹ 2400 ; R = 8 % and T = $\frac{1}{2}$ year

Hence C.I for the first half year is given by

C. I = $\frac{PRT}{100}$

= $\frac{2400\times 8\times 1}{2\times 100}$ = $₹96$

For the second part of the year or second half year ,

P = 2400 + 96 = 2496

Hence C. I for the second half year is given by,

C.I = $\frac{PRT}{100}$

= $\frac{2496\times 8\times 1}{2\times 100}$ = $₹99.84$

Hence the total C.I = ₹ ( 96 + 99.84)

= ₹ 195.84

Difference between C. I and S. I = ₹ 195.84 - ₹ 192

= ₹ 3.84