Question

What will be the difference between simple and compound interest at 10% per annum on a sum of Rs. 1000 after 4 years?

• A. Rs. 31
• B. Rs. 32.10
• C. Rs. 40.40
• D. Rs. 64.10

Answer 1

The correct option is D Rs. 64.10

Principal=1000 Rs.
Time=4 years
Rate of interes=10%
Then Simple interest $=\frac{1000\times 10\times 4}{100}=400Rs.$
Compound interest $=$ Amount $-$ Principal

Amount $=1000(1+\frac{10}{100}{)}^4$
$\Rightarrow 1000\times \frac{110}{100}\times \frac{110}{100}\times \frac{110}{100}\times \frac{110}{100}\times$
$\Rightarrow 1464.10Rs.$
$C.I.=1464.10-4000=464.10Rs.$
Difference between C.I and S.I.=$464.10-400=64.10Rs.$