Question

What is difference between simple and compound interest payable on a principal of ₹1200 in 2 years at rate of 10 p.c.p.a?

• A. Rs 13
• B. Rs 14
• C. Rs 15
• D. Rs 12

Answer 1

The correct option is D Rs 12

Given
P= ₹ 1200 ,T = 2 years ,R = 10 p.c.p.a

S.I = $\frac{P\times R\times T}{100}$

S.I= $\frac{1200\times 10\times 2}{100}$

= ₹ 240
Now for C.I

$A=P(1+\frac{r}{100}{)}^n$

$=1200(1+\frac{10}{100}{)}^2$

$=1200(\frac{110}{100}{)}^2$

$=1200\times \frac{110}{100}\times \frac{110}{100}$

$=1452$
C.I = A - P

=₹ 1452 - ₹ 1200
= ₹ 252
Difference between C.I and S.I
= C.I - S.I
= ₹ 252 - ₹ 240
= ₹ 12