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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

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B

₹ 6

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C

₹ 9

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D

₹ 12

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Solution

The correct option is B

₹ 6


For Simple Interest

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

S. I = PRT100

= 2400×10×1100 = 240

Compound Interest is reckoned half yearly

Given P = ₹ 2400 ; R = 10 % and T = 12 year

Hence C.I for the first half year

C. I = PRT100

= 2400×10×12×100 = 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 = PRT100

= 2520×10×12×100 = 126

Hence the total C.I = ₹ ( 120 + 126)

= ₹ 246

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

= ₹ 6


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