Question

What is the difference between simple interest and compound interest on ₹ $2400$ for one year at $10$ per annum reckoned half-yearly?

• A. ₹ 3
• B. ₹ 6
• C. ₹ 9
• D. ₹ 12

Answer 1

The correct option is B

₹ 6

For Simple Interest

Given P = ₹ 2400 ; R = 10 % and T = 1 year

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

= $\frac{2400\times 10\times 1}{100}$ = $₹240$

Compound Interest is reckoned half yearly

Given P = ₹ 2400 ; R = 10 % and T = $\frac{1}{2}$ year

Hence C.I for the first half year

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

= $\frac{2400\times 10\times 1}{2\times 100}$ = $₹120$

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

P = 2400 + 120 = 2520

Hence C. I for the second half year

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

= $\frac{2520\times 10\times 1}{2\times 100}$ = $₹126$

Hence the total C.I = ₹ ( 120 + 126)

= ₹ 246

Difference between C. I and S. I = ₹ 246 - ₹ 240

= ₹ 6